Two Economic Reports This Morning

Today’s Jobless Claims report was 553,000. Last week’s report was revised higher which made this week’s report another Covid low.

The Q1 GDP report was 6.4%. That was 0.1% below expectations. Consumer spending was up 10.7%.

Economic activity boomed to start 2021, as widespread vaccinations and more fuel from government spending helped get the U.S. closer to where it was before the Covid-19 pandemic struck.

Gross domestic product, the sum of all goods and services produced in the U.S. economy, jumped 6.4% for the first three months of the year on an annualized basis. Outside of the reopening-fueled third-quarter surge last year, it was the best period for GDP since the third quarter of 2003.

Economists surveyed by Dow Jones had been looking for a 6.5% increase. Q4 of 2020 accelerated at a 4.3% pace.

The boost in GDP came across a spectrum of areas, including increased personal consumption, fixed residential and nonresidential investment and government spending. Declines in inventories and exports as well as an increase in imports subtracted from the gain.

The latest numbers reflect an economy that has made major strides since the 2020 lockdown that sent more than 22 million American workers to the unemployment line and saw GDP plunge an unprecedented 31.4% in Q2 of 2020.

That was followed by a rebound of 33.4% in Q3. However, the Bureau of Economic Research still has not declared an end to the recession as GDP in total dollars has not passed its previous peak.

While about 14 million have returned to their jobs since then, the Federal Reserve estimates that some 8.4 million fewer hold jobs now than prior to the pandemic. The unemployment rate has tumbled from its high of 14.7% down to 6%, but that’s still well above the 3.5% in February 2020.

Posted by on April 29th, 2021 at 8:34 am


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