Last updateTue, 18 May 2021 4pm

Conference Board Predicts Robust Growth in Second Quarter

The Conference Board forecasts that U.S. Real GDP growth will rise to 8.6% (annualized rate) in Q2 2021 and 6.4% (year-over-year) in 2021 Following solid economic growth in Q1 2021 we anticipate further acceleration in growth in Q2 2021 and Q3 2021. The primary driver of this rapid expansion will be a surge in consumer spending as the economy fully reopens. High and increasing vaccination rates and low new COVID-19 case numbers indicate that the reopening process may be complete for much of the country by the end of the summer. Following a robust recovery in 2021, they forecast economic growth of 3.7% (year-over-year) in 2022 and 2.9% (year-over-year) in 2023. 

U.S. Added 266,000 Jobs in April, Short of Estimates

Payrolls rose by 266,000 in April, and the unemployment rate is at 6.1%, the U.S. Department of Labor reported. Notable job gains in leisure and hospitality, other services, and local government education were partially offset by employment declines in temporary help services and in couriers and messengers.

Manufacturing employment edged down in April (-18,000), following gains in the previous 2 months (+54,000 in March and +35,000 in February). In April, job losses in motor vehicles and parts (-27,000) and in wood products (-7,000) more than offset job gains in miscellaneous durable goods manufacturing (+13,000) and chemicals (+4,000). Employment in manufacturing is 515,000 lower than in February 2020. 

Factory Orders Rebounded in March

New orders for manufactured goods in March, up ten of the last eleven months, increased $5.8 billion or 1.1% to $512.9 billion, the U.S. Department of Commerce reported. This followed a 0.5% February decrease.

New orders for manufactured durable goods in March, up ten of the last eleven months, increased $2.0 billion or 0.8% to $256.9 billion, up from the previously published 0.5% increase. This followed a 0.9% February decrease. Fabricated metal products, up six of the last seven months, led the increase, $1.4 billion or 4.0% to $35.4 billion. 

U.S. GDP Increased 6.4% in the First Quarter

In the U.S., the gross domestic product (GDP) increased at an annual rate of 6.4% in the first quarter of 2021, according to the Department of Commerce. In the fourth quarter of 2020, real GDP increased 4.3%.

The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic. In the first quarter, government assistance payments, such as direct economic impact payments, expanded unemployment benefits, and Paycheck Protection Program loans, were distributed to households and businesses through the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act. 

Growth in Texas Manufacturing Activity Remains Robust

Texas factory activity expanded at solid clip in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell 14 points to 34.0, a reading still well above average and indicative of robust output growth. Other measures of manufacturing activity also pointed to strong growth this month, with demand, labor, price and wage indexes reaching all-time highs. Perceptions of broader business conditions improved markedly in April, and uncertainty subsided. 

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