Today’s Economic-Growth Numbers Could Show Signs of Boom to Come
The U.S. recovery probably found its rhythm in the first three months of 2021, according to early forecasts of data to be released by the Bureau of Economic Analysis and reported by The Washington Post. It appears likely that all coronavirus-era losses will be recovered by the middle of this year. Experts expect to learn the economy grew 1.3 percent in the quarter, according to a survey by Wolters Kluwer’s Blue Chip Economic Indicators. That would be 5.4 percent at an annual rate, but annual rates can be misleading amid an unprecedented crisis in which no trend is expected to continue for an entire year, so The Washington Post is focusing on quarterly rates until the economy is fully recovered. Other sources expect growth of up to 2 percent (8.2 percent annualized). Other than last summer, when early reopenings kicked the recovery off with a record 7.5 percent surge, Thursday’s figures could represent the fastest growth the economy has seen in 42 years. “I think we are on track for some pretty strong numbers, even beyond what we see in the Q1 number,” said Wendy Edelberg, director of the Hamilton Project. Edelberg said she’s looking out for strong consumer spending in 2021, driven by an easing of the pandemic, pent-up demand, solid household balance sheets and, “layering on top of that, a whole lot of fiscal support” from the American Rescue Plan. As recently as early January, economists thought the first quarter would see just 0.6 percent growth (2.3 percent annualized) as the pandemic peaked, but they raised their forecasts as stimulus money flooded the country and 94 million Americans were at least partly vaccinated in a three-month period.
