Real GDP Grew 6.5% in Q2-2021: Real GDP Now Above Its Pre-Pandemic Peak


  • Real GDP grew at an annualized rate of 6.5% in Q2-2021, which was not quite as strong as the consensus forecast had anticipated.
  • Despite the lower-than-expected growth rate, real GDP has now surpassed its pre-pandemic peak.
  • Overall GDP growth was driven by sizable gains in consumer spending and business fixed investment spending. On the other hand, net exports and inventories exerted drags on overall GDP growth.
  • Stocks have been depleted by strong spending and constrained supply. Restocking should help to support real GDP growth in coming quarters.
  • The PCE deflator, which is a measure of consumer prices, jumped at an annualized rate of 6.4% in Q2-2021, the sharpest quarterly increase since 1982.