US economy grows at a much better rate than expected through the end of 2021 although the acceleration is likely to slow as the spread of omicrons hampers hiring and resumes disrupt the global supply chain.
Gross domestic product, the sum of all goods and services produced in the October-December period, grew at an annual rate of 6.9%, the Commerce Department said on Thursday. Economists surveyed by Dow Jones were looking for a 5.5% gain.
Profits came from a rise in private inventory appreciation, strong consumer activity reflected in personal consumption spending, exports and business spending as measured by non-recurring fixed investment. reside.
The pace of government spending minus GDP as well as falling imports, as well as imports, is seen as a drag on output.
The quarter ended 2021 with a 5.7% annualized GDP growth, the strongest pace since 1984 as the US struggled to bounce back from an unprecedented drop in activity in the early days of the Covid pandemic. .
The report reflects an overall solid period for the economy after output slowed significantly over the summer. Supply chain problems tied to the pandemic coupled with strong demand fueled by unprecedented stimulus from Congress and the Federal Reserve have led to imbalances across the economy.
Inflation picks up sharply in 2021, especially in the second half, as supply cannot keep up with strong demand, especially for goods rather than services.
The United States enters 2022 on an uncertain footing, with Fed Chairman Jerome Powell warning on Wednesday that growth in the first half of the year is slowing, although he thinks the economy is generally strong.
With that measure, the Fed announced a rate hike in March, the first since 2018. Central banks are also expected to end their monthly asset purchases the same month. and began releasing their bond holdings shortly after.
Those tightening moves come in response to inflation that is at its highest level in nearly 40 years. Data on the Fed’s preferred inflation gauge, the personal consumption expenditures price index, will be released on Friday morning.
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