The US economy expanded significantly, increasing by 6.4% on a quarterly basis in the first quarter. Compared to the previous quarter, the increase was approximately 1.6%.
The economy had already grown significantly at the end of the previous quarter, when the annual quarterly GDP data showed growth of 4.3%, but the current growth has proven much faster than that. The big increase is not surprising, with the Reuters analyst consensus predicting a 6.1% quarterly year-on-year growth.
Therefore, the rally slightly exceeded analysts’ expectations.
The sub-data for the first quarter of the US economy was very positive: retail and unemployment statistics also improved, so it was known that the US economy would grow significantly in the first quarter.
With GDP data just released, it is already clear that the economy is close to pre-crisis levels, and analysts say rapid growth is also expected.By the end of this year, the economy may reach the level of GDP expected before the end of the crisis in 2021, that is, the US economy may return to the growth path it was in before the crisis. However, it is important to say that the outlook is surrounded by a lot of uncertainty, for example, a shortage of global chips may slow growth significantly and a pandemic could create surprises.
In addition to the resilience of the economy, the massive amount of fiscal stimulus has contributed greatly to the rapid recovery of the US economy. The US budget deficit reached nearly 20% of GDP last year and is expected to approach very close to 10% this year as well. Democratic President Joe Biden has also promised to spend, although his $ 1.9 trillion package has not fully felt the impact on the economy, it may have larger impacts on demand in the coming years.
Public spending will increase the budget deficit, and the rapid recovery compared to trading partners will increase the foreign trade deficit. The US foreign trade deficit hit a record for the third month in a row, according to yesterday’s announcement, Which could also have an effect on the dollar’s exchange rate. We wrote more about this here:
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In conjunction with the GDP, the usual weekly unemployment statistics came from the United States. The number of new help requests in the week was 553,000, slightly higher than analysts’ expectations – the consensus forecast of 549,000 new jobless people. Last week, the number came as a huge surprise, with 547,000 job losses far less than expected, so the numbers in the current release are not bad.
The number of long-term unemployed reached 3.66 million in the US in the week of April 16. Last week, the same number was still 3,674,000, and analysts had expected the number of the long-term unemployed to drop to 3,614,000, according to a recent report. Compared to this, the number in the current connection is somewhat less favorable.
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