US economy grows 1.6% in Q2, back to pre-pandemic size – Times of India

NEW DELHI: Vaccinations and federal aid helped lift the US economy out of its pandemic-induced hole this spring. The next test will be whether that momentum can continue as coronavirus cases rise, masks return and government help wanes.
Gross domestic product (GDP), the broadest measure of economic output, grew 1.6% in the second quarter of the year, the commerce department said on Thursday, up from 1.5% in the first three months of the year. On an annualised basis, second-quarter growth was 6.5%.
The growth, fueled by strong consumer spending and robust business investment, brought output, adjusted for inflation, back to its pre-pandemic level.

That is a remarkable achievement, exactly a year after the economy’s worst quarterly contraction on record. After the last recession ended in 2009, GDP took two years to rebound fully.
But the second-quarter figure fell short of economists’ forecasts, and the recovery is far from complete. Output is significantly below where it would be had growth continued on its pre-pandemic path.
Other economic measures remain deeply depressed, particularly for certain groups: The US still has nearly seven million fewer jobs than before the pandemic. The unemployment rate for Black workers in June was 9.2%.
“The good news is this is all occurring much more rapidly than after the financial crisis,” said Diane Swonk, chief economist for accounting firm Grant Thornton. “The bad news is the pain was much worse.”
Growth might have been stronger had it not been for supply-chain disruptions and labour challenges that made it difficult for many businesses to keep their shelves stocked and their stores staffed.