According to U.S. manufacturing data, the sector is at its highest growth level, unseen since August 2018. That report from the Institute for Supply Management helped confirm the idea among economists that output to start the year is much better than the low single-digit growth some of them had been predicting late last year.
The Atlanta Federal Reserve has shown a 10% gain for the first three months of 2021. If you did not know, the reserve tracks data in real-time to measure gross domestic product changes.
Furthermore, a note showed that personal income rose by 10% in January, thanks largely to $600 stimulus checks from the government. Besides, household wealth grew almost $2 trillion for the month while spending surged just 2.4%, which equals $340.9 billion.
It has to be mentioned that those numbers with a burst of almost $4 trillion in savings pointed to an economy growing powerfully. Analysts say that the economy will continue that path through the year.
The real GDP will remain V-shaped through the first half of 2021
According to Ed Yardeni of Yardeni Research, real GDP will remain V-shaped through the first half of 2021. In fact, it will remain strong through the end of the year. He added that it would no longer be a recovery beyond the first quarter of the year; As the real GDP will have fully rebounded during the current quarter.
Furthermore, it’s essential to note that economists previously hadn’t anticipated the $21.5 trillion U.S. economy to regain its pandemic-related losses until at least the second or third quarter of 2021.
However, a combination of system resilience and strong fiscal and monetary stimulus doses has helped speed the recovery. The GDP rose by 4.1% in the last quarter of 2020. In fact, it left the total of goods and services produced just $270 billion before the coronavirus pandemic.
According to New York Federal Reserve President John Williams, GDP growth this year could be the strongest we’ve seen in years.