Biden’s economy: better than we thought. Worse than we hoped
By Anneken Tappe, CNN Business
President Joe Biden’s full first quarter economic record as president: Okay, but not great.
The U.S. economy grew at a slightly faster pace than reported in the second quarter thanks to increased consumer spending, exports and inventory investment, the Economic Analysis Office reported Thursday.
It was the second time the growth rate for the quarter has been revised upwards.
Gross domestic product, the broadest measure of economic activity, grew at a rate of 6.7% between April and June, instead of 6.6% and 6.5% reported in previous estimates.
Yet even with the new upward revision, this growth remains below expectations, noted Mike Englund, chief economist at Action Economics.
The limited growth is largely due to “supply chain disruptions, which actually become more severe in the third quarter,” Englund added in a note to customers.
Americans, however, spent heavily on services in the spring and early summer – especially on going out to eat and travel – as vaccination rates increased. They also spent on pharmaceuticals and clothes and shoes. Hotels and restaurants contributed the most to the GDP growth rate in the industry comparison.
The price index that tracks consumer spending, called the PCE price index, which is the of the Federal Reserve preferred measure of inflation, remained unchanged from previous estimates at 6.5%. This is the highest level since the early 1980s.
The report also included a corporate profit tally: U.S. banks and financial firms saw profits soar by $ 52.8 billion in the second quarter, up from a meager increase of $ 1.3 billion in the first quarter. .
Profits for all other companies rose $ 221.3 billion, from $ 133.2 billion in the first three months of the year.
Unemployment registrations at their highest for seven weeks
In other economic data, weekly claims for unemployment benefits jumped to 362,000 last week, including adjustments for seasonal fluctuations, according to the Department of Labor. Without the seasonal adjustments, claims decreased slightly.
It was the highest level for complaints since early August – as well as the first time since the start of the pandemic that claims have increased for three consecutive weeks.
“However, it’s a very different situation now than then, so I would be very careful in making that comparison” with the onset of the pandemic, PNC chief economist Gus Faucher said in a note to clients, adding that “the level of initial requests is only about 6% of what it was then.”
Continuing unemployment claims, which count workers who have applied for benefits for at least two consecutive weeks, were little changed in the week ended September 18.
In the week ending September 11, five million American workers received benefits under various government programs, up from more than 11 million the week before, showing the end government unemployment programs during a pandemic is reflected in weekly data.
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