The US economy grew 6.6% in the second quarter and exceeded its pre-pandemic level

The US economy grew 6.6% in the second quarter and exceeded its pre-pandemic level
A person works on a snowmobile assembly line in Rosseau, Minnesota (Image: Reuters)

The US economy, buoyed by vaccinations and government aid, grew at an annual rate of 6.6% in the second quarter, in a new sign that the nation is steadily recovering from the recession caused by the pandemic and is now exceeding the level before it.

The Commerce Department report, released on Thursday, estimates that GDP growth – the total production of goods and services – accelerated in the April-July quarter After posting a solid annual rate of 6.3% in the January-March period.

The latter figure is far from the 7% in the year many economists had expected. The inconsistency was due to Supply chain obstruction related to the rapid reopening of the economy. The bottlenecks are placing a greater burden than expected on companies’ resupply efforts.

Consumer expenses —the main driver of the American economy— It posted a solid rise for the second consecutive quarter, this time at 11.8% annually.

The slight increase in the government’s growth estimates from April to June reflected, in part, the increase in business investment, which grew at a solid rate of 9.3%, and Export sales rose 6.6% after declining in the first quarter. Encountering this strength was a major hindrance in replenishing the inventory.

Goldman Sachs lowered its annual growth forecast for the current July-September quarter from 9% to 5.5%, citing the effects of delta divergence.. Similarly, economists at Wells Fargo lowered their forecast for third-quarter GDP from an annual rate of 8.8% to 6.8%, also due to the increase in COVID-19 cases.

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Some analysts have also lowered their full-year forecasts, albeit in smaller numbers, expecting that The economy could bounce back in the last three months of 2021 if coronavirus cases fall as more and more vaccines are given. But uncertainty remains.

(Bur Martin Krusinger – AFP)

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