The United States’ economic growth expanded only slightly in the second quarter of the year, failing to meet economists’ high expectations.
Although consumer spending exceeded expectations, numbers from the second quarter indicate that the economy only expanded 6.5%, well below the expectations of many economists.
Beth Ann Bovino, the chief U.S. economist at S&P Global Ratings, predicted that the economy would expand at an 11 percent pace during the second quarter, while most other economists estimated only 8 percent.
“People felt confident and safe and started to go out and spend,” Bovino said before the numbers were released Thursday morning.
“Yes, the [stimulus checks] were certainly a help, but I think the ball was already in motion,” she added. “Even back in December, they couldn’t spend fast enough, they were sitting on so much cash.”
Rubeela Farooqi, the chief U.S. economist for High Frequency Economics, expressed disappointment at the news but predicted that growth would rise in the second half of 2021.
“In short, Q2 GDP was weaker than expected. Household spending and business investment provided a strong lift but inventories, residential investment, government spending and net exports were drags on growth,” she said. “The level of output surpassed the pre-pandemic level in the second quarter with GDP 0.8% above where it was in Q4-19.”
“A solid pace of growth in Q2 is expected to moderate in the second half of 2021,” she added. “The extent of slowdown is still not clear, but we expect GDP growth to remain above trend over coming quarters.”
For his part, Biden argued that the failure to meet expectations is somehow good news.
“America is on the move again, and today’s new GDP numbers put our economy back at pre-pandemic levels,” he tweeted. “Make no mistake: this growth is no accident, it’s a direct result of our efforts to deliver economic relief to families, small businesses, and communities across the country.”
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