U.S. gross domestic product grew at a 6.7% annualized rate in the second quarter of 2021, a final estimate from the Bureau of Economic Analysis showed Thursday morning. The slight upward revision of a tenth of a percentage point indicates that economic growth from April through June was heading in the right direction following last year’s pandemic-induced recession.
The numbers are an about-face from the same period a year ago when the economy stagnated and plunged a record 31.4%.
Accommodation and food services led as the largest driver of growth, while retail trade and transportation and warehousing saw declines.
The news comes the same day as the weekly jobless report, which was worse than expected once again. While GDP has grown at a hot pace, the labor market is lagging and the unemployment rate is still well above what it was prior to the pandemic.
“Negative surprise alert: New jobless claims have risen for a third straight week, surging by 11,000 to 362,000. The latest increase confounded hopes for improvement," said Mark Hamrick, Bankrate's senior economic analyst.
The first quarter of this year also saw breakneck growth, with the economy expanding by 6.4% as vaccines became more accessible and businesses began seeing consumers start to return.
Economic growth has largely been driven by a return of the retail, service, and hospitality industries, which nosedived during the height of the pandemic amid consumers’ fears of contracting COVID-19 and government restrictions on businesses.
Despite the growth in the second quarter, GDP estimates for the rest of the year have been revised down by the Federal Reserve and economists because of surging cases of the delta variant, which began this summer.
The central bank recently slashed its GDP prediction from 7% in 2021 to 5.9% and slashed its growth forecast from 3.8% to 3.3% for next year in light of the affect that the new strain is having on the economy.
Goldman Sachs also recently revised down its GDP forecast for 2021 from 6.2% to 5.7%, and Wells Fargo also cut some of its GDP predictions.
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Original Author: Zachary Halaschak
Original Location: Economic growth revised up slightly to 6.7% annual rate in second quarter