That’s how much more money consumers spent in the second quarter compared with the first, as people took advantage of the reopening economy and government relief programs to enjoy things they couldn’t in the months following the March 2020 lockdown.
Consumers splurged on just about everything in 2021’s second quarter, according to the Bureau of Economic Analysis on Thursday. Activities like dining out, recreation, and travel were more in demand, but spending also grew on things like on cars (14.4%), gasoline (34.3%), clothes (34.4%), and groceries (2.4%).
The 11.8% rise in consumer spending, the fourth-largest increase in 74 years of quarterly data, was spurred by $1,400-per-person stimulus payments issued in March, as well as fewer restrictions on business and movement. (The biggest-ever spending jump was 41.4% in the third quarter of 2020, following the economy’s initial reopening, with the other big gains coming in the early 1950s.)
Thanks to the pumped-up spending, real gross domestic product, or GDP, increased at an annual rate of 6.5% in the second quarter, lifting total economic output back above its pre-pandemic peak. Personal spending is the largest contributor to GDP, the total value of all the country’s goods and services.
James Knightley, chief international economist at ING, said the second-quarter spending shows that “the U.S. consumer continues to fire on all cylinders.”
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