Economy
July 29, 2021
GDP Grows By 6.5% in Q2’s Initial Estimate
Written by David Schollaert
U.S. gross domestic product (GDP) grew by 6.5% in the second quarter of 2021 on an annualized basis, according to the advanced estimate from the Bureau of Economic Analysis (BEA). While the gain was the second-fastest pace of growth in 38 years, it was a disappointing mark, falling short of forecasts for 8% GDP. The second quarter’s 6.5% growth rate was slightly better than the 6.3% gain in Q1, which was revised down slightly.
The increase in real GDP in the second quarter came thanks to increases in personal consumption expenditures, which rose 11.8% as consumers accounted for 69% of all activity. Nonresidential fixed investment, exports, and state and local government spending also helped boost growth. The increases were partly offset by a decrease of 3.5% in gross private domestic investment, as declines in private inventory and residential investment held back gains. Rising imports and a 5% decline in the rate of federal government spending were also factors, the BEA said.
