The U.S. economy advanced a robust 6.4% in the first three months of the year, the Commerce Department said Thursday, as consumers started spending again with the easing of coronavirus restrictions and the vaccinations of millions of Americans.
The recovery in the January-to-March period, on top of a 4.3% gain in the last three months of 2020, put the $21 trillion U.S. economy just slightly ahead of where it was in early 2020, before the pandemic swept into the country and ravaged its economy.
Economists are predicting continued gains for the world’s biggest economy throughout 2021, fueled partly by government assistance to all but the wealthiest Americans and government spending to boost some hard-hit sectors of the economy.
Many businesses are starting to hire more workers and ramp up operations that had been curtailed by the pandemic that has killed 574,000 Americans, the most in any country.
With the hiring of more employees, the number of workers making initial claims for unemployment compensation has been falling in recent weeks. The Labor Department on Thursday said 553,000 jobless workers sought compensation last week, down 13,000 from the revised figure of a week before.
The new figure was the lowest since mid-March last year but still more than twice the 218,000-weekly average in 2019 before the pandemic began.
The country’s central bank, the Federal Reserve, on Wednesday held its benchmark interest rate near zero and said it plans to continue supporting the economic recovery, even as it acknowledged that the U.S. economy is improving.
“Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened,” the Fed said after a two-day policy meeting.
Fed Chairman Jerome Powell told reporters that the recovery has advanced “more quickly than generally expected,” while adding that it “remains uneven and far from complete.”
U.S. employers added 916,000 jobs in March and some economists are predicting that another 500,000 or more will be added each month throughout 2021.