US GDP grew almost as much in the first half of 2021 as some forecasters expected for the entire year

Prior to the passage of the American Rescue plan, some of the major economic forecasters expected the US economy to grow between 3.4 and 4.2 percent in the four quarters of 2021. The new advance estimate from the Bureau of Economic Analysis shows that the economy grew 3.1 percent in just the first two quarters (an annualized rate of 6.4 percent). This is over 90 percent of the growth that the Organization for Economic Cooperation and Development (OECD) or the Survey of Professional Forecasters (SPF) expected for the entire year and is 3/4 or more of what other forecasters expected in just half of the time they expected it to get there.

Assuming the US economy continues to grow at a meaningful rate in the second half of the year, it is very likely to exceed every major forecast made before the passage of the American Rescue Plan—and may even exceed forecasts from prior to the pandemic, as fiscal and monetary support are on track to more than offset the negative impact of the pandemic on aggregate economic activity.

Read Jason Furman and Wilson Powell III's monthly labor market blog for more on the US economic recovery, "Pace of US job growth picks up as signs point to tight labor market."