On Q1 GDP: Missed It By That Much!

Q1-2021 GDP barely missed a full V-shaped recovery to the Q4-2019 pre-pandemic peak, leaving a mere 0.87% to go, which will get done if Q2-2021 is at least 3.53% at an annual rate. We had predicted more than a year ago that the recovery would take no more than three quarters, and we barely missed. February’s weather disaster played a role, and the massive third round of stimulus and unemployment benefits held back re-employment and re-opening of service-intensive businesses. This near-total recovery to pre-pandemic GDP levels has been accomplished with only 95% of the workforce employed at peak, implying an astonishing productivity revolution that sets the stage for an economic boom.