US economy grew at a much better-than-expected pace to end 2021
The Commerce Department reported that the gross domestic product (GDP) of the US accelerated at a 6.9% annualized pace in the fourth quarter, well ahead of the 5.5% estimate in 2021 amid a surge in inventories. Imports, which are a subtraction in the calculation of GDP, increased.
On Thursday, the Department’s Bureau of Economic Analysis (BEA) said in a report, “In the fourth quarter, COVID-19 cases resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country.”
It added, “Government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased as provisions of several federal programs expired or tapered off.”
Xinhua news agency quoted the report as saying that the increase in real GDP primarily reflected increases in private inventory investment, exports, personal consumption expenditures (PCE), and nonresidential fixed investment that was partly offset by decreases in both federal and state and local government spending.
In the third quarter, real GDP increased 2.3 percent amid the Delta variant-fuelled COVID-19 surge and continued supply bottleneck, the BEA data showed. Real GDP increased 5.7 percent in 2021, following a decrease of 3.4 percent in 2020.
Jim Baird, chief investment officer at Plante Moran Financial Advisors said, “The strength of the economy last year stood in stark contrast to the collapse in activity in early 2020, but also speaks to the success of both the public and private sector in quickly adapting to the unprecedented challenges created by the pandemic. That being said, potential headwinds still exist, as the global risks associated with the COVID-19 pandemic persist.”
[With Inputs from IANS]
PGurus is now on Telegram. Click here to join our channel and stay updated with all the latest news and views
For all the latest updates, download PGurus App.