Consumers shook off the pandemic blues as 2021 began, putting stimulus checks to work buying cars and other goods and helping set the stage for what could be the fastest economic growth in decades.

The initial reading on the country’s first-quarter economic performance, delivered Thursday by the Commerce Department, showed that much remained far from normal. Even with a big jump in personal income, there was only a modest increase in spending on services like travel, dining and even health care.

But economists say that is already changing as more vaccinations are delivered and coronavirus-related business restrictions are eased. With better weather, savings accumulated during a long year of lockdowns, and an itch to make up for forced inactivity, Americans will have plenty of reasons to go out and spend.

“Consumers are now back in the driver’s seat when it comes to economic activity, and that’s the way we like it,” said Gregory Daco, chief U.S. economist at Oxford Economics. “A consumer that is feeling confident about the outlook will generally spend more freely.”

Over all, the broadest measure of the economy — gross domestic product — grew by 1.6 percent in the first three months of 2021, compared with 1.1 percent in the final quarter of last year. On an annualized basis, the first-quarter growth rate was 6.4 percent.

2019 Q4 LEVEL

$20 trillion

+1.6%

FROM

PRIOR

QUARTER

15

10

Gross domestic product,

adjusted for inflation and

seasonality, at annual rates

5

’15

’16

’17

’18

’19

’20

’21

2019 Q4 LEVEL

$20 trillion

+1.6%

FROM

PRIOR

QUARTER

15

10

Gross domestic product, adjusted for inflation

and seasonality, at annual rates

5

’15

’16

’17

’18

’19

’20

’21

Source: Bureau of Economic Analysis

By Ella Koeze

Total economic output should return to prepandemic levels by summer — in fact, Mr. Daco believes it has already done so. His firm estimates that the economy will expand by 3.1 percent in the second quarter, or about 13 percent on an annual basis. For the year, it expects growth of 7.5 percent, the best performance since 1951.

“This may be the tip of the iceberg,” Mr. Daco said. “I think we will see much stronger momentum into summer as health conditions continue to improve, policy support remains in place and employment strengthens.”

Helped by several rounds of government relief payments, households were sitting on a collective $4.1 trillion in savings in the first quarter, up from $1.2 trillion before the pandemic began.

That should find its way into the economy as services that were mostly off-limits come to life and customers flock to reopened establishments. Mr. Daco expects consumer spending to grow by more than 9 percent this year, a record.

+15%

2001

1990

Cumulative percent change in

G.D.P. from the start of the

last five recessions

+10

1980

+5

2007

0

–5

2020

–10

Final quarter

before

recession

5 quarters

into recession

16

8

12

+15%

2001

1990

+10

Cumulative percent change in G.D.P.

from the start of the last five recessions

1980

+5

2007

0

–5

2020

–10

Final quarter

before

recession

5 quarters

into recession

8

12

16

Note: Gross domestic product is adjusted for inflation and seasonality. Recessions are labeled by the years they started.

Source: Bureau of Economic Analysis

By Ella Koeze

The expansion last quarter was spurred by two batches of government payments to most Americans — $600 a person from a relief package enacted just before the end of 2020, and $1,400 more from legislation approved in March. That quickly translated into purchases of cars, furniture and household appliances, as well as clothes and food.

There was a similar jump in income last year after the first round of relief checks, which also caused a bounce in spending on goods.

“To some extent, when people have money, they’re going to spend it,” said Ben Herzon, executive director of IHS Markit, a forecasting firm. “If they’re not spending on services because they’re not going to movies or amusement parks, they’re going to derive utility from goods.”

He said he expected spending on goods to ease in the second quarter as services spending begins to rebound more strongly.

Percent change in

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