INSUBCONTINENT EXCLUSIVE:
Growth was powered by consumer spending, which increased at a 10.7 per centrateUnited States economic growth accelerated in the first
quarter, fueled by massive government aid to households and businesses, charting the course for what is expected to be the strongest
performance this year in nearly four decades
The United States' economy is rebounding more quickly compared to its global rivals, thanks to two additional rounds of COVID-19 relief
money from Washington as well as easing anxiety over the pandemic, which has boosted domestic demand and allowed services businesses like
restaurants and bars to reopen.The second-fastest gross domestic product growth since the third quarter of 2003, reported by the Commerce
Department on Thursday, left output just 0.9 per cent below its level at the end of 2019
Economists expect a full recovery from the pandemic recession, which started in February 2020, in late 2023
The report is a boost for President Joe Biden as he celebrated 100 days in the White House."In early 2021, the economy was served a strong
cocktail of improving health conditions and rapid vaccinations along with a fizzy dose of fiscal stimulus and a steady flow of monetary
quarter, the government said in its advance estimate for the first three months of the year
That followed a 4.3 per cent growth rate in the fourth quarter
It was the biggest first-quarter increase in growth since 1984
Economists polled by Reuters had forecast GDP growth would increase at a 6.1 per cent pace in the January-March period.Growth was powered by
quarter.Former President Donald Trump's government provided nearly $3 trillion in relief money early in the pandemic, leading to record
GDP growth in the third quarter of last year
That was followed by nearly $900 billion in additional stimulus in late December
The Biden administration offered another $1.9 trillion rescue package in March, which sent one-time $1,400 checks to qualified households
and extended a $300 unemployment subsidy through early September.The Federal Reserve on Wednesday acknowledged the burgeoning domestic
activity, but the United States central bank gave no sign it was ready to reduce its extraordinary support for the recovery.The rapidly
accelerating economy could dampen enthusiasm among some moderate Democrats for Biden's ambitious economic agenda
Biden on Wednesday unveiled a sweeping $1.8 trillion package for families and education in his first joint speech to Congress.Republicans
oppose more stimulus, now worried about swelling debt
The new package and an earlier infrastructure and jobs plan total around $4 trillion, rivaling the annual federal budget
United States stocks opened higher
The dollar was steady against a basket of currencies
Many economists, including Fed Chair Jerome Powell, expect higher inflation will be transitory, arguing that the labor market remains 8.4
million jobs below its peak in February 2020.Though the labor market recovery is back on track, it will probably take a few more years to
recover the more than 22 million jobs lost during the recession
In a separate report on Thursday, the Labor Department said initial claims for state unemployment benefits fell 13,000 to a seasonally
adjusted 553,000 during the week ended April 24.Data for the prior week was revised to show 19,000 more applications received than
Though claims have dropped from a record 6.149 million in early April 2020, they remain well above the range of 200,000 to 250,000 that is
viewed as consistent with a healthy labor market.There were 16.6 million people receiving unemployment benefits in the first week of April
"We're still probably a couple years away from pre-pandemic employment levels, but based on the powerful economic momentum built up in the
first quarter, we should return close to a fully-functioning economy in the second quarter," said Robert Frick, corporate economist at Navy
Federal Credit Union in Vienna, Virginia.The economy continued to power ahead early in the second quarter, with consumer spending vaulting
to a 14-month high in April, thanks to the fiscal stimulus and the expansion of the COVID-19 vaccination program to all American adults
Americans have accumulated at least $2 trillion in excess savings
Economists forecast growth this year could top seven per cent, which would be the fastest since 1984
spending on equipment, which posted a third straight quarter of double-digit expansion
But business investment in nonresidential structures such as mining exploration, shafts and wells declined for a sixth straight
quarter.Residential investment contributed to GDP growth for a third straight quarter
But trade was a drag for the third consecutive quarter as some of the robust domestic demand was satiated with imports
Strong consumption meant fewer unsold goods in warehouses, which resulted in inventory accumulation subtracting from GDP growth.
