Fiscal Stimulus Powers U.S. Economic Growth In First Quarter

• U.S economic growth accelerated in the first quarter as the government gave money to mostly lower-income households, fueling consumer spending and setting the course for what is expected to be the strongest performance this year in nearly four decades.
• The government largesse also extended to businesses, especially in the high-contact services industry. The massive fiscal stimulus and easing anxiety over COVID-19, with all adult Americans now eligible for a vaccination against the virus, have resulted in a faster economic rebound in the United States compared to its global rivals.
• The second-fastest gross domestic product growth since the third quarter of 2003, reported by the Commerce Department on Thursday, left output just 0.9% shy of its level at the end of 2019. Economists expect a full recovery from the pandemic recession, which started in February 2020, in late 2023.
• GDP increased at a 6.4% annualized rate last quarter, the government said in its advance estimate for the first three months of the year. That followed a 4.3% growth rate in the fourth quarter. It was the biggest first-quarter increase in growth since 1984. Economists polled by Reuters had forecast GDP growth would increase at a 6.1% pace in the January-March period.

(Source: Reuters)