Reference:CGTN | Updated:2 May 2021
United States GDP increased at an annual rate of 6.4 percent in the first quarter of 2021, according to the Bureau of Economic Analysis (BEA).
The first quarter's pace was the second-fastest GDP growth pace since the third quarter of 2003 and followed a 4.3 percent rate in the fourth quarter, beating an estimation of 6.1 percent by a Reuters poll earlier.
The increase in the first-quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic, BEA said in a statement.
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, followed by nearly $900 billion in additional stimulus in late December.
President Joe Biden's 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.
Federal government spending jumped nearly 14 percent in the quarter.
Meanwhile, real disposable personal income increased 61.3 percent, compared with a decrease of 10.1 percent in the fourth quarter, according to the statement, with the personal saving rate – personal saving as a percentage of disposable personal income – 21.0 percent in the first quarter, compared with 13.0 percent.
A separate report from the Labor Department on Thursday showed 553,000 people filed for state unemployment benefits during the week ended April 24, compared to 566,000 in the prior period.
Though initial jobless claims have dropped from a record 6.149 million in early April 2020, they remain well above the 200,000 to 250,000 range viewed as consistent with a healthy labor market.
In addition, the Commerce Department's price index for personal-consumption expenditures (PCE) is the Federal Reserve (Fed)'s preferred inflation gauge. But even excluding more volatile food and energy prices, the price index for PCE rose 2.3 percent, surpassing the Fed's 2.0 percent target.
The Fed on Wednesday acknowledged the burgeoning domestic activity, but still pledged to keep its stimulative policies in place, including interest rates near zero, until employment has recovered and inflation exceeds the target for some time.
The International Monetary Fund estimated a growth of 6.4 percent for the United States this year, according to the latest World Economic Outlook, with its unemployment expected to fall from 8.1 percent in 2020 to 5.8 percent.
Last year, the U.S. economy shrank by 3.5 percent, its worst performance since the end of World War II.