US economy expands 6.4% in first quarter

ANKARA

The US economy expanded by an annual rate of 6.4% in the first quarter of this year, according to the Commerce Department's first reading of the data on Thursday.

Analysts expected gross domestic product (GDP) to rise 6.1%, while real GDP increased 4.3% in the fourth quarter of 2020.

After the US economy shrank by a record 31.4% in the second quarter of last year amid the COVID-19 pandemic, GDP climbed 33.4% in the third quarter. The world's largest economy contracted 3.5% in 2020 – its worst drop since 1946.

"The increase in real GDP in the first quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending," the department said in a statement.

These, however, were offset by declines in private inventory investment and exports, while imports rose.

The US economy is still struggling with a weak labor market and high unemployment.

While the Fed kept its benchmark interest rate unchanged on Wednesday, it reaffirmed not to make a rate hike until 2023 and to continue its asset purchase program until full employment and economic recovery are achieved.