WASHINGTON (AP) — The U.S. economy grew at a solid 6.4% rate in the first three months of this year, setting the stage for what economists are forecasting could be the strongest year for the economy in growth led by strong consumer spending.
The Commerce Department said Thursday that growth in the gross domestic product, the country’s total output of goods and services, was unchanged from two previous estimates. It came after growth at a rate of 4.3% in the fourth quarter.
Economists believe GDP growth will accelerate in the current April-June quarter to an annual rate of 10% or better. For the whole year, the economy is expected to grow by around 7%.
That would be the best showing since a 7.2% surge in 1984, a year the economy was emerging from a deep recession triggered by high interest rates engineered by the Federal Reserve to halt a bout of high inflation in the 1970s.
Some analysts think that growth could surpass the 1984 mark and come in around 7.7% this year. That would be the best performance since 1951.
Thursday’s GDP report was the government’s third and final look at first-quarter GDP.
Consumer spending, which accounts for more than two-thirds of economic activity, grew at a sizzling annual rate of 11.4% in first three months of the year, up slightly from the 11.3% growth estimate made a month ago.
The spending gain reflected increases in goods purchases, led by auto sales, and gains in spending on services, led by food services and travel accommodations, two areas that have benefited from the re-opening of the economy as vaccinations have increased.
Business investment grew at a strong 11.7% rate, better than the previous estimate of 10.8% growth, while government spending increased at a 5.7% rate, slightly below last month’s estimate of a 5.8% gain. Read more business news