The Chronicle’s monthly update on key economic indicators that experts say are important to nonprofits point to continued strong growth as we move into the second quarter of 2021. The following indicators showed notable changes since our previous update.
Gross Domestic Product
+ 6.4 percent annualized rate in first quarter 2021
The broadest measure of the economy, the U.S. gross domestic product, increased at a sharp clip in the first quarter, driven by stimulus payments, expanded unemployment benefits, and Paycheck Protection Program loans, according to data released Thursday. Disposable personal income increased by 61 percent. It follows a strong fourth quarter in 2020, where GDP expanded by 4.3 percent.
Between late February and early April, the national economy grew at a “moderate pace” as consumer spending increased, according to an April summary of national economic conditions from the Federal Reserve system.
Stock Market
S&P 500, Nasdaq Composite indexes up more than 5 percent in April
Investors seemed pleased with increasing vaccination rates in the United States, despite major upticks in Covid transmission in India and South America, according to the Wall Street Journal.
Unemployment
6 percent in March, down from 6.2 percent in February
The national unemployment rate dropped slightly, from 6.2 percent in February to 6 percent in March, according to the Bureau of Labor Statistics.
Roughly 575,000 people filed for first-time unemployment claims in the week ending April 24, a new low in the pandemic era and continuing a long, slow downward trend.
Roughly 9.7 million workers remain unemployed in the United States. A good chunk of them worked at nonprofits, which employed roughly 828,000 fewer workers in March than they did before the pandemic, according to estimates from the Johns Hopkins Center for Civil Society Studies.
Consumer Confidence
+ 2 percent
Buoyed by increasing domestic vaccination rates and stimulus checks, consumers are feeling better about the economy, more so than they have in a year, according to the University of Michigan’s consumer sentiment index.
Preliminary results for April 2021 show a nearly 2 percent increase in consumer sentiment since March and a 20.5 percent increase over April 2020. Out of a maximum possible value of 100, the Index of Consumer Sentiment was rated at 86.5 in the University of Michigan’s survey
“The strength in current economic conditions reflects much larger than usual stimulus payments during the past year and much larger than usual economic gains due to comparisons with last year’s shutdowns,” reads a summary of the preliminary results for April. “Over all, the data support an ongoing surge in consumer spending, but given persistent uncertainty about the course of Covid-19 and inflation, cautious drawdowns of savings can be anticipated.”
Regional Economic Indicators
‘Moderate’ to ‘strong’ growth across U.S. regions
The Federal Reserve‘s Beige Book report, a regular summary of regional economic activity, cited consistent signs of economic expansion at the regional level. The New York-New Jersey economy grew at a “strong pace” for the first time since the pandemic began. Other regional economies reported similar moderate to strong growth rates since February.
