“This is not a typical US economic recovery, it is the fastest rebound in history and it no longer needs emergency stimulus from Washington” — Paul Ebeling
According to 3rd estimate data released by the Bureau of Economic Analysis (BEA), real GDP growth increased at an annual rate of 6.4% in Q-1 of Y 2021 up from an advance estimate of 4% for Q-4 of Y 2020.
“Meanwhile, the entire economy has less than 1% remaining to recover, as a slight majority of sectors (12 of 22) have now fully recovered,” a BMO Economics report stated. “The latter set is led by finance and insurance, with real output having advanced more than 7% since before the pandemic (2019 Q4). This was an industry that proved very amenable to working remotely and is benefiting from strong housing and equity markets, along with lots of saving.”
And 5 more industries have since recovered to real GDP levels past those in Q-4 of Y 2019 since the prior Quarter, when only 7 industries had recovered.
In this Quarter, 4 industry groups: durable goods manufacturing (3.7%), professional, scientific and technical services (2.8%), information (3.4%), and administrative and waste management services (5.4%) account for 50% the total growth in the Quarter but represent less than a 25% of GDP.
Other Strong sectors included arts, entertainment, and recreation (8%) as well as accommodation and food services (4%) 2 industries which were greatly impacted by restrictions during the pandemic. But, they both need to recover real GDP by 34.6% 19.9%, respectively, in order to return to Q4 2019 levels.
“Looking ahead to Q2, the economy is expected to cross the full-recovery line and then some, perhaps pulling another industry (or 2) with it,” the report read. “However, most of the lagging sectors still have a long way to go, and it doesn’t help that some states kept restrictions in place through June.”
The report augurs a positive outlook on Q-3 with “no activity-limiting restrictions remaining.”
Have a positive weekend, Keep the Faith!