The US economy grew 6.4% in the first three months of this year, leading economists to believe that 2021 could be the strongest growth year in 37 years, thanks to strong consumer spending, among other things.
The Commerce Department reported Thursday that growth in gross domestic product – the country’s total production of goods and services – was unchanged from both estimates. The growth rate was higher than 4.3% in the fourth quarter.
Economists believe GDP growth will accelerate in the current April-June quarter at an annual rate of 10% or better. For the full year, the US economy is expected to grow by about 7%, which would be the best result since the 7.2% rise in 1984, when the economy was emerging from a deep, spike-triggered recession. The interest rates adopted by the Federal Reserve to stem rampant high inflation in the 1970s.
Some analysts believe that US GDP growth may even exceed the 1984 mark and reach 7.7% this year. This would be his best performance since 1951.
Thursday’s GDP report was the government’s third and final assessment of GDP for the first quarter.
Consumer spending, which accounts for more than two-thirds of economic activity, grew at a staggering annual rate of 11.4% in the first three months of the year, slightly more than the 11.3% growth estimate estimated one month earlier.
The increase in spending reflected an increase in purchases of goods, led by car sales, and an increase in spending on services, primarily food and accommodation services for travel, two areas that benefited from the reopening of the economy, with the increase in vaccination.
Business investment grew at a solid rate of 11.7%, better than the previous estimate of 10.8% growth, while public spending increased at a rate of 5.7%, slightly less than last month’s estimate, from an expected gain of 5.8%.