Despite lower than expected growth, U.S. economic output surpassed an important milestone in the second quarter of 2021, according to a new report by the Department of Commerce. The economy, as measured by real gross domestic product (GDP), grew at an annual rate of 6.5 percent in the second quarter of 2021. With this level of growth, the total size of the economy has rebounded from the pandemic and surpassed where the economy stood at the end of the fourth quarter of 2019, before the pandemic began.
GDP represents the total value of goods and services produced in the United States. The Bureau of Economic Analysis (BEA), which is part of the Commerce Department, releases annual and quarterly updates on GDP growth to measure the size of the economy and pace of economic growth. It is one of several metrics that business leaders and policymakers should observe to assess the health of the economy.
The 6.5 percent growth rate in Q2 follows a 6.3 percent growth in Q1 of 2021, revised downward from its original estimate of 6.4 percent. Some of the key drivers of growth in Q2 included business reopenings, consumer spending, and high-levels of government spending through the American Rescue Plan Act.
Q2 growth was lower than many economists had forecasted. Surveys of economists by The Wall Street Journal and Reuters anticipated a growth rate of 8.5 percent. Economists suggest that factors such as inflation, supply chain disruptions, the workforce shortage, and the continued threat of Covid-19 are suppressing economic growth and could threaten the pace of the recovery in the current and future quarters.
Read the full report from BEA here.