The U.S. economy grew by 6.5 percent during the second quarter of 2021, surpassing pre-pandemic GDP for the first time, the Commerce Department said on Thursday.
While the economy has grown beyond its size before the coronavirus pandemic, growth in the second quarter fell short of expectations. Economists had projected growth of about 8.5 percent, in interviews with the Wall Street Journal and Reuters.
Further impediments to growth include rising inflation and supply-chain shortages, including a shortage of computer chips. Additionally, many unemployed Americans have not yet returned to the workforce.
Widespread vaccination against coronavirus has blunted the potential economic impact of the spread of the Delta variant, economists said.
“I really don’t expect anything like we saw in the spring of last year,” Ben Herzon, executive director at IHS Markit, told the Journal. “Going forward we’ll just see how high the case count gets and how nervous some people get.”
“The fundamentals for consumers and businesses are still very good,” Gus Faucher, PNC Financial chief economist, told the Associated Press.
Meanwhile, the Federal Reserve said on Wednesday that the agency would keep interest rates near zero. The agency will wait for further “progress” on inflation and employment before raising interest rates.