WASHINGTON – Powered by consumers and fueled by government aid, the U.S. economy is achieving a remarkably fast recovery from the recession that ripped through the country last year on the heels of the novel coronavirus and cost tens of millions of Americans their jobs and businesses.
The economy grew last quarter at a vigorous 6.4% annual rate, the government said Thursday, and expectations are that the current quarter will be even better.
The number of people seeking unemployment aid – a rough reflection of layoffs – last week reached its lowest point since the pandemic struck. And the National Association of Realtors said Thursday that more Americans signed contracts to buy homes in March, reflecting a strong housing market as summer approaches.
Economists say that widespread vaccinations and declining viral cases, the reopening of more businesses, a huge infusion of federal aid and healthy job gains should help sustain steady growth. For 2021 as a whole, they expect the economy to expand around 7%, which would mark the fastest calendar-year growth since 1984.
In March, U.S. employers added 916,000 jobs – the biggest burst of hiring since August. Meantime, retail spending has surged, manufacturing output is up and consumer confidence has reached its highest point since the pandemic began.
The speed of the rebounding economy has been particularly striking given the scope of damage the pandemic inflicted on it beginning in March of last year. With businesses all but shut down, the economy contracted at a record annual pace of 31% in the April-to-June quarter of last year before rebounding sharply in the subsequent months.
For all the U.S. economy's gains, it still has a long way to go. More than 8 million jobs remain lost to the pandemic. And the recovery remains sharply uneven: Most college-educated and white collar employees have been able to work from home during the last year. Many have even built up savings and expanded their wealth from rising home values and a record-setting stock market, which has rocketed more than 80% from March of last year.
By contrast, job cuts have fallen heavily on low-wage workers, racial minorities and people without college educations. In addition, many women, especially working mothers, have had to leave the workforce to care for children.