U.S. Economy Returns To Pre-Pandemic Levels
The National Bureau of Economic Research said earlier this month that the pandemic recession was the shortest of all recent downturns – it lasted for just the two months of March and April 2020. Now, there’s news that the U.S. economy in the second quarter has grown at the fastest rate since last fall at an annualized rate of 6.5%.
The economy has now returned to its pre-pandemic levels in terms of real gross domestic product. The growth rate that economists forecasted was 8.5%, so while experts say there is a reason for celebration, there are still factors that could put a damper on the growth.
The economic recovery has mainly been fueled by consumer spending. As more businesses have reopened, consumers have spent more money on dining out and traveling.
The U.S. economy grew at an annualized rate of 6.5% in the second quarter, helped by massive government aid and vaccinations. Economists forecast an 8.5% increase https://t.co/WULfOzMu1J pic.twitter.com/RwbBPE9Apo
— Reuters (@Reuters) July 29, 2021
The price index for personal consumption expenditures rose to 6.4% in the second quarter, the highest rate since 1982. The price index has been 6.1%, the highest rate since 1983. Meanwhile, experts at the Federal Reserve say that prices have risen because of supply constraints and labor shortages.
Fed Chairman Jerome Powell said that economists have cut down their expectations for GDP growth for the second half of the year because of the waning of fiscal stimulus money and price increases as well as lockdowns resulting from the delta variant spread.