The daily business briefing: April 30, 2021
U.S. economic growth picks up as pandemic restrictions ease, Amazon's 1st-quarter profit soars, and more
U.S. economic growth picks up as spending rises, pandemic restrictions ease
U.S. economic growth accelerated in the first quarter of 2021 to an annualized rate of 6.4 percent, the Commerce Department reported Thursday. The jump from a 4.3 percent rate the previous quarter brought the nation's GDP nearly back to pre-pandemic levels. Economists predict next quarter's growth could reach a 10 percent annual pace, a soaring rate bolstered by increased interest in shopping, traveling, and dining out as pandemic restrictions slowly taper off. Economists expected the growth rate for 2021 as a whole to be around 7 percent, the fastest pace in a calendar year since 1984, according to Politico. Big federal spending, including President Biden's $1.9 trillion coronavirus relief package, provided a boost, helping GDP rebound from the plunge at the start of the pandemic faster than it did after the Great Recession.
Amazon 1st-quarter profit rises by 220 percent
Amazon on Thursday reported that its first-quarter profit rose by 220 percent compared to the same period last year, reaching $8.1 billion. The online retail giant also reported sales of $108.5 billion, up 44 percent from a year earlier as the pandemic shifted buying online and consumers spend coronavirus relief checks. The gains exceeded the expectations of Wall Street analysts. Amazon shares gained 2 percent in pre-market trading. The pandemic-era shift to remote work and education helped boost Amazon Web Services, the company's profitable cloud computing business, which had sales of $13.5 billion in the quarter. "We certainly had strong volumes really across all of our businesses," Amazon's finance chief, Brian Olsavsky, told reporters.
Jobless claims dip to pandemic low
New applications for unemployment benefits fell by 13,000 to 533,000 last week, the Labor Department reported. The drop brought new jobless claims to a pandemic-era low for the third straight week. The slow hiring recovery came as more Americans got coronavirus vaccine shots and restrictions on businesses continued to ease. The news, coupled with new government data on economic growth that beat expectations, added to recent signs that the economy is returning to pre-pandemic levels. "With more news of cities set to fully reopen in the coming months and vaccinations picking up speed, we're starting to see some real firepower behind an economic comeback," Chris Larkin, managing director of trading at E-Trade, said Thursday in comments emailed to The Washington Post.
CDC guidance gives cruise companies option to sail again in summer
The Centers for Disease Control and Prevention has issued new guidance saying that cruise ships will be able to sail in U.S. waters by mid-summer, provided 95 percent of their passengers and 98 percent of their crew have been fully vaccinated against COVID-19. The new guidance, issued Wednesday and obtained Thursday by CBS News and other outlets, gives cruise lines a way to return to the seas without meeting the prior requirement of making trial voyages before they can let paying customers on board. The pandemic has devastated cruise lines. Royal Caribbean Cruises reported a net loss of $1.1 billion in the first quarter of 2021. CEO Richard Fain referenced the new CDC guidance in an earnings call on Thursday, saying it would let the company resume sailing during the May to September Alaska cruise season.
Stock futures fall after S&P 500's latest record close
U.S. stock index futures pulled back early Friday following Thursday gains that lifted the S&P 500 to a record high. Futures tied to the Dow Jones Industrial Average were down by 0.3 percent several hours before the opening bell. Those for the S&P 500 and the Nasdaq fell by 0.4 percent and about 0.5 percent, respectively. The retreat came despite a stellar earnings report from online retail giant Amazon, which saw record first-quarter profit in a flurry of consumer spending. Twitter's earnings helped offset Amazon's good news, as the social media platform reported quarterly user growth and second-quarter guidance that fell short of analysts' expectations. Twitter shares dropped by 12 percent in pre-market trading.