WASHINGTON (AP) — Powered by consumers, the U.S. economy grew at a brisk 6.4 percent annual rate last quarter — a show of strength fueled by government aid and declining viral cases that could drive further gains as the nation rebounds with unusual speed from the pandemic recession.
Thursday’s report from the Commerce Department estimated that the nation’s gross domestic product — its total output of goods and services — accelerated in the January-March quarter from a 4.3 percent annual gain in the final quarter of 2020.
Growth in the current April-June period is expected to be faster still, potentially reaching a 10 percent annual pace or more, led by an increase in people willing and able to travel, shop, dine out and otherwise resume their spending habits.
Economists say that widespread vaccinations, the reopening of more businesses, a huge infusion of federal spending and healthy job gains should help sustain steady growth. For 2021 as a whole, they expect the economy to expand close to 7 percent, which would mark the fastest calendar-year growth since 1984.
A major reason for the brightening expectations is the record-level spending that is poised to flow into the economy. A $1.9 trillion package that President Joe Biden got through Congress in March provided, among other rescue aid, $1,400 stimulus payments to most adults.
On top of that, Biden is proposing two additional huge spending plans: a $2.3 trillion infrastructure package and a $1.8 trillion investment in children, families and education that the president promoted Wednesday night in his first address to a joint session of Congress.