FACT BRIEF

Is the US economy growing at the fastest pace in nearly three decades?

Monday, June 28, 2021

By Lisa Freedland

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YES

U.S. gross domestic product in the first quarter of 2021 posted its biggest increase in almost three decades, expanding at an annual rate of 6.4%. That was the highest rate since 1984.

The Federal Reserve Board on June 16 raised its outlook for full year growth to 7%, which would also be the highest rate since 1984. The pace of expansion reflects the strong recovery from a sharp economic slowdown caused by the coronavirus pandemic. The Fed expects growth in 2022 to reach 3.3%, above its longer-term outlook as well as the pace of the last 15 years.

The recovery has also led to a higher reported rate of inflation, with the benchmark index figure in May up 3.9% from last year, representing the greatest increase since 1992. Fed officials expect the price increases to abate as overall conditions return closer to normal.

This fact brief is responsive to conversations such as this one.

Sources

Bureau of Economic Analysis Gross Domestic Product

Federal Reserve System Summary of economic projections

World Bank US GDP growth, 1961-2019

Bureau of Economic Analysis Personal consumption expenditures price index

CNBC Key inflation indicator posts biggest year-over-year gain in nearly three decades

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