Sunday, October 26, 2025

US Economy Rebounds 6.4% Amid Surge in Consumer Spending

The US economy gained even more momentum in the first quarter of 2021, as unprecedented stimulus initiatives and easing Covid-19 restrictions helped fuel consumer spending.

On Thursday, the Commerce Department reported that GDP expanded 6.4% on an annualized basis in the first three months of the year, exceeding economists’ forecasts of 6.1% growth, according to a Refinitiv survey. Compared to the final quarter of 2020, economic output advanced 1.6%.

The latest optimistic figures come as an increased number of Americans were vaccinated against Covid-19, and states began to ease pandemic-related restrictions, which prompted consumers to splurge on goods and services. Personal consumption expenditures rose by a 10.7% annualized rate, as Americans delved into their stimulus cheques and savings pile.

The consumer drove the economy’s resurgence last quarter, mainly thanks to an ongoing splurge on durable goods but also a revival in services outlays. Reopenings, the accelerating hiring boom and very generous fiscal transfers all boosted spending last quarter,” Oxford Economics economist Oren Klachkin explained to the Financial Times.

Indeed, the Federal Reserve on Wednesday acknowledged the strong economic rebound, but stopped short of easing its monetary support until full employment is achieved. Although the “recovery has progressed more quickly than generally expected, it remains uneven and far from complete,” said Fed Chairman Jerome Powell in a speech following the two-day FOMC meeting.

In a separate report published by the Department of Labour on Thursday, a total of 553,000 Americans filed for first-time unemployment benefits— nearly the lowest level since the beginning of the pandemic. However, the latest figures still remain significantly elevated relative to historic standards.


Information for this briefing was found via the Commerce Department the DOL. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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