Washington | The United States has started to recover from the economic crisis linked to COVID-19, and first-quarter GDP growth, driven by government stimulus plans and vaccination, is just a preview. taste of what the rest of the year should be like.
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The gross domestic product recorded an increase of 6.4% at an annualized rate between January and March, thanks in particular to the jump in purchases made by consumers, according to the first estimate of the US Department of Commerce published on Thursday.
This is more than the 4.3% in the fourth quarter of 2020. Excluding the exceptional jump of 33.4% in the second quarter of 2020, it is even the strongest quarterly growth since July 2003.
“GDP growth in the first quarter reflects the continued economic recovery, the reopening of establishments and the government’s response to the COVID-19 pandemic,” the Commerce Department said in its press release.
Between January and March in fact, households and businesses received financial aid paid under two stimulus plans, one adopted at the very end of December, the other voted in early March.
This made it possible to get through the winter despite the rise in cases of COVID-19 contamination, which had once again disrupted economic activity.
And the vaccination campaign, carried out with rapidity with now nearly a third of the population fully vaccinated, is also leading the recovery.
However, this growth has not yet fully allowed the world’s largest economy to return to its pre-pandemic level of GDP.
“In early 2021, the US economy benefited from a solid cocktail of improved health conditions and rapid vaccinations, as well as a sparkling dose of fiscal stimulus and a steady flow of monetary policy support.” , commented Gregory Daco, analyst for Oxford Economics, in a note.
Investment plans
And the best is yet to come, he warns: “in 2021, the (American) economy is expected to grow by around 7.5% – its best performance since 1951 – with consumer spending increasing by over 9%. , a record ”.
To ensure growth and jobs, the Biden administration is counting on colossal investment plans, which the American president detailed Wednesday evening: a “project for American families” of $ 1.8 trillion over 10 years, and a broad plan of investments in infrastructure of 2000 billion dollars.
However, they will have to be adopted by Congress, which is far from won.
The United States favors annualized GDP growth, which compares to the previous quarter and then projects the development over the entire year at this rate. This makes it possible to anticipate annual growth if the pace is maintained.
But other advanced economies use the quarter-over-quarter comparison. The increase in GDP is then, with this measure, 1.6% for the United States and 0.6% for China. That of France, which will be published, is expected at 1%.
Using this same method of calculation, Chinese growth was 0.6% in the first quarter.
The prices go up
Consumer prices have already started to climb, with inflation accelerating to 3.5% over one year in the 1st quarter, against 1.5% in the fourth quarter of 2020, according to the PCE index.
This is much more than the 2% target that the US central bank, the Fed, is targeting. However, it warned on Wednesday that it would need more to tighten its monetary policy, which is now very accommodating, in order to continue to support the economy.
The Federal Reserve wants to achieve a maximum and inclusive level of employment, and see inflation exceed for a time the target of 2% per year, then stabilize around this objective.
However, the United States are “still far from full employment”, warned its president Jerome Powell, specifying that there is still 8.4 million jobs, including 3 million in bars and restaurants.