Warren Buffett touts U.S. economy's unexpected strength as Berkshire rebounds
By Jonathan Stempel and John McCrank
(Reuters) - Warren Buffett said on Saturday that the U.S. economy is faring far better than he might have predicted early in the coronavirus pandemic and that the improvement is benefiting his conglomerate, Berkshire Hathaway Inc.
Speaking at Berkshire's annual meeting, Buffett said the economy has been "resurrected in an extraordinarily effective way" by monetary stimulus from the Federal Reserve and fiscal stimulus from the U.S. Congress.
"It did the job," Buffett said, adding that 85% of the economy is running in "super high gear."
The annual meeting was held in Los Angeles, where the 90-year-old Buffett joined Berkshire's 97-year-old vice chairman Charlie Munger, to answer more than three hours of shareholder questions.
Berkshire scrapped for a second year its annual shareholder weekend in its Omaha, Nebraska, hometown, an extravaganza that normally attracts around 40,000 shareholders. Saturday's meeting was broadcast on Yahoo Finance.
Many of Berkshire's dozens of operating units have been rebounding as anxiety over COVID-19 lessens, more people get vaccinated, stimulus checks are spent, business restrictions are eased, and confidence about the economy grows.
Gross domestic product, a broad measure of the U.S. economy, grew at an annualized 6.4% rate from January to March, according to an advance estimate by the government.
Some economists project the economy will grow in 2021 at the fastest rate in nearly four decades.
Buffett had been relatively subdued at last year's annual meeting, despite expressing confidence that the country's historic resiliency to big problems, which he called the "American miracle," would prevail again.
Berkshire's meeting came after the company said first-quarter profit rose 20% to about $7 billion, while net income including investments totaled $11.7 billion..
Results benefited from better-than-expected underwriting at Geico, more shopping at retailers including Berkshire's car dealerships, See's Candies and the Nebraska Furniture Mart, and a near doubling of profit at the Clayton Homes mobile home unit.
Berkshire also repurchased $6.6 billion of its own stock in the first quarter, following a record $24.7 billion last year.
Despite the buybacks, Berkshire ended March with $145.4 billion of cash. Buffett's last major acquisition was more than five years ago.
Shareholders were expected at the meeting to vote on proposals requiring Berkshire to disclose more about its efforts to address climate change and promote diversity and inclusion in its workforce.
Buffett opposes both proposals. He controls nearly one-third of Berkshire's voting power, and the proposals will likely be defeated.
(Reporting by John McCrank and Jonathan Stempel in New York; Editing by Steve Orlofsky)