U.S. Economy Appears to Be Lifting Off

U.S. Economy Appears to Be Lifting Off

GDP likely grew robustly in the first quarter as the government distributed Covid-19 stimulus checks and consumers stepped up spending

The U.S. economy appears to have expanded rapidly in the first quarter, extending what economists project will be a robust, consumer-led recovery from the pandemic this year. Fueled by a flood of federal cash to households and rising vaccinations, the nation’s gross domestic product likely grew at a 6.5% seasonally adjusted, annual rate in the first three months of 2021, according to economists surveyed by The Wall Street Journal. Official figures on GDP—the broadest measure of goods and services produced across the U.S—are set to be released by the Commerce Department on Thursday at 8:30 a.m. ET. Output grew at a 4.3% rate in the fourth quarter of last year after rising at a 33.4% clip in the third. The rebound from a steep downturn last spring early in the pandemic was quicker than what many economists expected but still left the economy in a hole. For all of last year, the economy shrank by 2.4% when comparing fourth-quarter output to a year earlier—the first contraction since the 2007-09 recession. The recovery likely accelerated in the first quarter as more people received a Covid-19 vaccine, states and cities lifted business restrictions, and stimulus payments landed in bank accounts. Consumer confidence rose in April to the highest level in 14 months, the Conference Board said Tuesday. “The U.S. economy is clearly in the nascent period of the recovery and headed for a robust expansion,” said Joseph Brusuelas, chief economist at RSM, a consulting firm. It is possible first-quarter output may have returned to pre-pandemic levels, he said.