The reopening of the economy and the checks distributed by the Biden administration boosted consumption by Americans.
The GDP growth of the United States amounted to 6.6% in the second quarter, on an annualized basis, a little more than initially estimated, according to the second estimate of the Commerce Department released Thursday.
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This second estimate has been refined compared to the first, published a month ago, which reported 6.5% growth in gross domestic product (GDP). A third and final measure will be published at the end of September. The reopening of the economy, thanks to vaccination, and the billions of dollars distributed to households have stimulated consumption by Americans.
Pre-pandemic level
This growth has allowed the world’s largest economy to return to its pre-pandemic level, with GDP for the first time surpassing that of the fourth quarter of 2019 – the last to be untouched by the crisis caused by the pandemic. Covid-19.
The United States favors annualized growth, which compares to the previous quarter and then projects the development over the entire year at this rate. The increase in GDP reached 1.6% – identical to the first estimate – if we compare to the previous quarter, which is the calculation method used by other countries such as France. And compared to the second quarter of 2020, growth is 12.2%.
But the indicators for the month of July have already shown a slowing of the economic recovery, because of the Delta variant which has resumed cases of Covid-19 contamination, damaging the confidence of some Americans. Data already published “show lower activity in July and August amid fourth wave of Covid infections», Notes Lydia Boussour, economist for Oxford Economics.
Galloping inflation
«Although the Delta variant remains a significant risk (…), the economy is unlikely to reverse“, She underlines, anticipating a”weaker growthIn the fourth quarter. “For 2021, the economy is expected to grow by around 6%, its strongest performance since 1984», Adds the economist. As for prices, their increase over the three months from April to June was revised to 6.5%, instead of 6.4%, according to the PCE inflation index, against 3.8% in the previous quarter. This is the fastest pace since 1982.
Excluding volatile food and energy prices, so-called core inflation is at its highest since 1975, at 6.1% – identical to the first estimate – compared to the second quarter of 2020. In the first quarter quarter, inflation was 2.7% year on year. PCE inflation for July versus June will be released on Friday; it should show a moderation of the rise in prices compared to the previous month, to 0.4% against 0.5%.
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Another inflation index, the CPI, showed in July a slowdown over one month (+ 0.5%) and stability over one year (+ 5.4%), compared to June. This is in line with the words of many economists, who believe that this high inflation is due to temporary pressures, which will therefore not lead to a lasting price spike.
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