US economy surges in first quarter as COVID recovery gains steam

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The US economy surged 6.4 percent in the first quarter of the year as the US recovery from the COVID-19 pandemic picked up speed, driven by government spending and mass vaccinations.

America’s gross domestic product — the value of all goods and services produced here — grew by 6.4 percent from January to March on an annualized basis, per a report from the federal government. Economists polled by Dow Jones and The Wall Street Journal expected an annualized growth rate of 6.5 percent.

Outside of the third quarter of 2020 when the economy grew more than 30 percent, it was the best quarter for the GDP since 2003.

Today, the Labor Department reported that first-time claims for jobless benefits totaled 553,000 last week, slightly higher than the 528,000 expected by economists polled by Dow Jones.

The Labor Department also revised the previous week’s numbers for jobless claims up by 19,000 from 547,000 to 566,000. That means new claims fell by 13,000. The department said the 4-week moving average of new claims has reached its lowest point since March 2020, when the coronavirus took hold in the US.

The new economic data come after the US posted strong growth of 4.3 percent in the fourth quarter of 2020. That growth, however, stalled toward the end of the year as daily new COVID-19 infections and deaths climbed to record levels, prompting fresh restrictions in some parts of the country and yet again shuttering businesses.

In the full year 2020, the US GDP shrank 3.5 percent, the largest decline since 1946 when the U.S. demobilized after World War II. That staggering decline has set the country up to accelerate growth in 2021, many economists predicted before the new GDP numbers were published.