US economy back to pre-pandemic level

WASHINGTON (AFP) – The US economy returned to its pre-pandemic level in the second quarter, data released Thursday showed, giving President Joe Biden a political win as Congress moves closer to passing a long-debated plan to improve the country's infrastructure.

However the 6.5 percent annualized rate of expansion in the April-to-June period was slower than expected, and the Commerce Department report confirmed that inflation spiked as customers vaccinated against Covid-19 returned to businesses that suffered throughout the pandemic last year.

"Make no mistake: this growth is no accident, it's a direct result of our efforts to deliver economic relief to families, small businesses, and communities across the country," the Democratic president tweeted following the release of the data.

After taking office in January, Biden won passage of a massive $1.9 trillion spending bill to help the economy's recovery from the historic downturn the pandemic caused last year.

However, the disruptions of the preceding months have made getting production and employment back to normal challenging, while prices have surged as businesses face renewed demand, shortages of components and supply chain delays.

Biden has called for even more spending to reshape the world's largest economy, and on Wednesday evening, the Senate voted to advance a trillion-dollar infrastructure package that would pump historic levels of federal funding into fixing US roads, bridges and waterways as well as expand broadband internet and expand clean energy programs.

But Republicans who form a sizeable minority in the Senate could end up turning against the plan, while some progressive Democrats in the House of Representatives have warned they won't approve it unless Biden's ambitious $3.5 billion budget package including once-in-ageneration spending on health care, education, social welfare and climate action is also passed.

The pandemic caused a sharp downturn in the United States last year, with the economy ultimately shrinking 3.5 percent, its worst collapse since modern record-keeping began in 1946.

The country's Covid-19 vaccination campaign along with emergency spending packages passed under both Biden and his Republican predecessor Donald Trump have kept it from suffering a worse downturn. And the IMF predicts that this year the US economy will expand seven percent.

In the second quarter, the Commerce Department said GDP climbed to $19.4 trillion, above its level in the fourth quarter of 2019, before the virus broke out.