Growth in the U.S. economy likely accelerated at 6.5% in the first quarter of 2021, according to economists polled by The Wall Street Journal. The U.S. Commerce Department will publish the data on Thursday.
Economic rebound in the United States began early this year after Americans started to get coronavirus vaccinations in larger numbers. The economy got another big boost from a $1.9 billion of financial aid that was approved in early March.
In normal times, the U.S. economy grows an average of 2% to 2.5% a year. Yet the Coronavirus pandemic has spawned unprecedented ups and downs in the economy.
The government sent out $600 checks in January and $1,400 checks in March to most Americans, so it’s no surprise consumer spending surged in the first quarter. Economists predict outlays jumped almost 10%, compared to just 2.3% in the fourth quarter.
Consumer spending accounts for more than two-thirds of U.S. economic activity and largely explains why the first quarter was so strong.
What also helped were expanded unemployment benefits and a surge in hiring as businesses reopened after lockdowns to combat the pandemic according to Market Watch. That put about 1.5 million people back to work in the first quarter.
Companies also got into the act. They hired more people, increased investment, and ramped up production in an effort to keep up with rising demand.