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The U.S. economy grew 6.5 percent in this year’s second quarter, the U.S. commerce department announced, an astonishing pace in normal times but less than expected during recovery from a once-a-century economic crash, CNBC reported.
The growth rate barely edged past the first quarter’s downwardly adjusted figure of 6.3 percent.
Dow Jones had estimated an 8.4-percent clip; actual production was almost 25 percent less.
However, the expansion brought the U.S. GDP back to pre-crisis output levels, according to the Financial Times.
Personal spending led the gains, growing 11.8 percent year over year and beating the first quarter’s 11.3-percent pace.
New claims for unemployment bumped up to 400,000 during the week ending 24 July, also higher than Dow Jones’ projection of 380,000, but lower than the previous week’s 434,000.
Continuing claims rose to 3.7 million and the number of people receiving any kind of jobless benefit went up 600,000 to 13.16 million as of 10 July, U.S. labor department figures showed.
Private domestic investment slipped 3.5 percent during the period, due largely to slowing home sales.
Investment in industrial inventories also fell, and government spending was down 5 percent, according to the Bureau of Economic Analysis.
Imports also rose during the quarter.
Deposits into personal savings accounts totaled $1.97 trillion, compared to $4.1 trillion in the previous quarter.
After crashing 31.4 percent during 2020’s second quarter, the economy bounced back 33.4 percent in last year’s third trimester.
The new figures show that this year’s second-quarter growth barely bested the first quarter’s. That flattening arc of expansion lends support to analysts’ predictions that the U.S. economic recovery peaked in April, May, and June this year. (See “Inflation Likely to Stay Strong as Recovery Slows, BOA Says,” Trends Journal, 29 June 2021.)
While growth will continue, the economy will expand at a more modest pace from now on, they believe.
“The good news is that the economy has now surpassed its pre-pandemic level,” economist Paul Ashworth at Capital Economics wrote in a research note quoted by CNBC.
“But, with the impact from the fiscal stimulus waning, surging prices weakening purchasing power, the delta variant running amok in the south, and the savings rate lower than we thought, we expect GDP growth to slow to 3.5 percent annualized in the second half of this year,” he wrote.
The Personal Consumption Expenditures Price Index, the U.S. Federal Reserve’s preferred inflation measure, swelled 6.4 percent in this year’s second quarter, compared to 3.8 percent in the first.
TRENDPOST: While the U.S. economy grew at 6.5 percent in the second quarter, the Federal Reserve’s preferred gauge of inflation rose at an annualized rate of 6.4 percent in the second quarter. Thus, for U.S. households, where wages rose just 3.2 percent year-on-year, what is billed as an “economic recovery,” is fiction for the plantation workers of Slavelandia.