The reopening of the economy surged in President Joe Biden’s first 100 days, with U.S. gross domestic product growth reaching 6.4%, the second best quarterly reading since 2003, after the pandemic rebound in the third quarter of the last year.
Widespread vaccinations, warmer temperatures and stimulus checks have allowed the economy to grow 1.6% in the first three months of 2021.
Consumer spending, which accounts for two-thirds of economic growth, rose 10.7% in the first quarter, according to preliminary estimates released by the Commerce Department on Thursday. Spending on services rebounded slightly, increasing 4.6%. In April, consumer confidence hit a 14-month high.
Economists had predicted an increase of 6.5%. The gross domestic product of the United States, or GDP, a measure of the total amount of goods and services produced, grew 1.1% in the last quarter of 2020, for an annualized pace of 4.3%.
GDP hit an all-time low in 2020, falling a record 31.4% in the second quarter as the economy halted, stores and businesses closed, and workers stayed home for avoid spreading the virus.
Since then, around 14 million people have returned to work and the unemployment rate – which peaked at 14.8% last spring – has now fallen to 6%.
But the growth rate could decline as companies, which have downsized to survive pandemic shutdowns, now have to scramble with shrinking resources and supply chain disruptions to pivot and rebuild to capture growing demand.
Business owners are complaining about worker shortages, and some have suggested that federal benefits are keeping workers on the sidelines. Workers, meanwhile, complain that the jobs available are too rudimentary, exposed to frontline risks and pay too low. As the situation improves, experts are advising consumers to prepare for slower deliveries and service, and higher prices.
CORRECTION (April 29, 2021, 6:36 PM ET): A previous version of this article incorrectly identified first quarter GDP growth as the best since 2003. It was the second best, after the pandemic reopening and the third rebound. quarter of 2020.