US economy grows 6.4 per cent in first quarter as recovery gathers momentum
- US economy stood at US$22.05 trillion at the end of March
- ‘Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened,’ says the Fed
The US reported that its economy grew 6.4 per cent on an annualised basis in the first quarter, a faster clip compared to the previous quarter as the pandemic turned a corner with a concerted push for vaccination.
The US economy expanded to US$22.05 trillion at the end of March, according to preliminary data released by the Commerce Department on Thursday. Economists had estimated the first quarter to grow 6.1 per cent.
“The typical year-on-year comparisons aren’t going to be terribly useful in the months ahead, they will almost all show huge increases,” said Patrick Chovanec, economic adviser at Silvercrest Asset Management, referring to the low base numbers from last year as economies were battered in the midst of the pandemic. “It’s far more instructive to look at the absolute numbers, and compare where things stand compared to pre-Covid.”
The growth rates were choppy last year. For the first three months of 2020, the US economy shrank 5 per cent as restrictions for economic activities started in mid-March. As the virus raged on, the economy contracted 31.4 per cent in the second quarter, then bounced back 33.4 per cent in the third, and grew 4.3 per cent in the fourth quarter, according to the Commerce Department.