The US economy grew at an annual rate of 6.4 percent in the first quarter of 2021, the Commerce Department reported.
Upward revisions to nonresidential fixed investment, private inventory investment, and exports were offset by an upward revision to imports, which are a subtraction in the calculation of gross domestic product (GDP), according to the latest estimate released on Thursday by the Department’s Bureau of Economic Analysis.
The increase in real GDP in the first quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending, which were partly offset by decreases in private inventory investment and exports, the Bureau said, adding that imports increased, reports Xinhua news agency.
ALSO READ: Thailand targets full reopening in 120 days to reboot economy
“The increase in the first-quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the Covid-19 pandemic,” the Bureau said.
At its two-day policy meeting last week, the US Federal Reserve decided to keep its benchmark interest rates unchanged at the record-low level of near-zero, reiterating inflation surge is “transitory” and resisting sending out signals on the timeline to taper its bond-buying program.
The median forecast among Fed officials called for a 7.0 percent GDP growth by year-end, 0.5 percentage point up from the March projection, according to the Fed’s latest Summary of Economic Projections.
Inflation, meanwhile, is expected to climb to 3.4 percent by year-end, 1 percentage point up from the March projection.
ALSO READ: 2020-21 darkest year of economy in four decades: Chidambaram
Core PCE price index, the Fed’s preferred inflation measure, is expected to rise to 3 percent by year-end, up 0.8 percentage points from the March projection, and well above the Fed’s 2 percent long-term goal.
SOURCE-IANS
