Amazon’s sales increased 44% to $108.5bn in the first three months of the year as the company’s pandemic boom continued into 2021.
The sales figures from the online shopping and web services giant came after the release of slew of positive economic reports that suggest the US is shaking off the worst of the pandemic recession.
Amazon made a profit of $8.1bn for the quarter – $2.7bn a month – beating analysts’ forecasts after a series of better than expected results from tech companies and others.
While Amazon profited throughout the coronavirus downturn, there are now signs that the economic recovery is spreading.
The news came after the commerce department said the US economy took off in the first quarter, soaring 6.4% on an annual basis as rising vaccinations, a massive round of government stimulus and a steady recovery in the jobs market helped reverse some of the impact of the coronavirus pandemic.
The annualized rate suggests the US economy is firmly on the road to recovery. In normal times US gross domestic product (GDP) – the broadest measure of the economy – grows at about 2-2.5% a year, but the pandemic triggered wild swings as the country went into lockdown and businesses shuttered.
The news comes amid a flood of good news for the US economy. The corporate earnings season has seen many sectors of the economy from banking to automotive bouncing back from the pandemic. Apple too reported bumper results on Tuesday, the latest tech company to record booming sales during the pandemic.
New York City, the center of the US pandemic last year, will fully reopen on 1 July, while 43% of the population has received at least one dose of a Covid-19 vaccine and more than a quarter of the US is now fully vaccinated.
US stock markets set record highs again after the GDP report and copper prices, seen as key indicator of economic demand, rose to $10,000 a tonne for the first time since 2011.
The outpouring of good news is all the more remarkable given the scale of economic woe the pandemic heaped on the US economy.
A year ago US unemployment hit a post-second world war high of 14.8%, it has since fallen to 6%. The economy suffered its worst quarterly contraction in history last year, shrinking 32.9% on an annualized basis. It grew at 4.3% in the last three months of 2020 after recording a remarkable annual growth rate of 33.4% in the previous three months.
“The increase in first-quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the Covid-19 pandemic,” the commerce department said.
Problems remain, the number of people filing for unemployment benefits each week is still high. On Thursday the labor department said 553,000 people filed for benefits last week. The number has been falling sharply but remains close to twice as high as pre-pandemic levels and the jobs market is still down 8.4m jobs.
Racial disparities also remain. Black and Latino Americans suffered the hardest as the pandemic closed businesses across the US and their unemployment rates remain elevated in comparison with white Americans. Women, too, have been pushed out of the workforce by the shutdowns, triggering what some economists have dubbed a “shecession”. Lack of childcare and other issues have meant that 1.8 million women have left the workforce entirely.
But the fast rollout of vaccines, the reopening of businesses and the Biden administration’s $1.9tn stimulus bill have boosted consumer confidence and fueled an impressive recovery.
The US government sent cheques to 90 million Americans in March and consumer confidence is approaching pre-pandemic levels having risen for four months in a row. Consumer spending accounts for two-thirds of US economic activity.
Consumption growth surged 10.7% over the quarter and the US savings rate grew to 21.0% from 13.0%. Capital Economics expects those savers to start spending now that Covid-19 restrictions are lifting.
“With the elevated saving rate, households are still flush with cash and, now that restrictions are being eased as the vaccination program proves a success, that will allow them to boost spending on the worst-affected services, without needing to pull back too much on goods spending,” the economic forecasting group wrote in a note to investors.