Fiscal stimulus fires up U.S. economy; labor market

Quote:

Fiscal stimulus fires up U.S. economy; labor market recovering

That would be the Stimulus that every GOP Senator voted against.

BY LUCIA MUTIKANI, REUTERS - 9:58 AM ET 4/29/2021

WASHINGTON (Reuters) - U.S. economic growth accelerated in the first quarter, fueled by massive government aid to households and businesses, charting the course for what is expected to be the strongest performance this year in nearly four decades.

The United States' economy is rebounding more quickly compared to its global rivals, thanks to two additional rounds of COVID-19 relief money from Washington as well as easing anxiety over the pandemic, which has boosted domestic demand and allowed services businesses like restaurants and bars to reopen.

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% below its level at the end of 2019. Economists expect a full recovery from the pandemic recession, which started in February 2020, in late 2023.

The report is a boost for President Joe Biden as he celebrated 100 days in the White House.

"In early 2021, the economy was served a strong cocktail of improving health conditions and rapid vaccinations along with a fizzy dose of fiscal stimulus and a steady flow of monetary policy support," said Lydia Boussour, lead U.S. economist at Oxford Economics in New York. "Looking ahead, we foresee the economy's spring bloom turning into a summer boom."

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.

Growth was powered by consumer spending, which increased at a 10.7% rate as households bought motor vehicles, furniture, recreational goods and electronics. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 2.3% pace in the fourth quarter.