The delta variant of the coronavirus has emerged as a new threat, but the U.S. economy sizzled in the spring and repaired much of the harm caused by the Covid pandemic.

Economists polled by The Wall Street Journal forecast an annualized 9.1% increase in gross domestic product in the second quarter — one of the largest growth spurts on record.

Here’s what to watch Thursday when the government reports GDP.


Americans spent a ton of money in the spring. Consumer spending — the main driver of the economy — likely rose by 10% or more.

How big is that? Before the pandemic, outlays rose an average of 2.5% a quarter.

The reasons for the splurge are obvious: More people got vaccinated, coronavirus cases declined, government restrictions were lifted and Americans went out again to eat, shop and entertain themselves.

Then there was the latest government stimulus bonzanza. Households got another flush of cash from a nearly $2 trillion federal financial package. So they were armed with plenty of money to spend.

Read: ‘Delta’ chill in the air? A booming economy faces new uncertainty


Companies are investing heavily for a post-Covid world and they’ve got plenty of business. The big problem has been keeping up with demand. They simply can’t find enough workers or get badly needed supplies on time to produce as much as they are able to sell.

Look for business investment to rise, but don’t expect it to match the torrid double-digit percentage pace in the prior three quarters.

Stockpiled goods

Strong sales and lagging production are likely to result in a big drawdown in inventories — or goods such as autos, computers or canned food stockpiled for future sale. Lower inventories reduce GDP.

“Firms have a long way to go before they fully replenish the inventories they’ve drawn down this year,” said Will Compernolle, senior economist at FHN Financial.


Housing is a wildcard. Lots of people want to buy homes, but construction companies can’t build them fast enough. High prices for materials such as a lumber and a shortage of skilled craftsmen are among the biggest obstacles.

Investment in housing could fall for the first time in a year and also partly depress what’s expected to be a stratospheric increase in GDP.

Read: Durable-goods orders rise again even as businesses battle major shortages


Washington approved a $1.9 trillion coronavirus-relief package in the spring and pumped money into the economy. Government spending likely rose around 4% and was another huge contributor to the increase in GDP.

Exports & imports

Chronic U.S. international trade deficits have been a drag on GDP for decades. Yet the increase in U.S. exports might have slightly outpaced imports in the second quarter, making the trade deficit a negligible factor.


The cost of living has surged this year and the GDP report is only going to confirm what is already well known. The rate of inflation rose sharply in the spring and likely topped 3% or even more.

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