US Economy Rebounds in Fourth Quarter, Sees Best Growth Since the 1980s
Gross Domestic Product (GDP) increased at an annual rate of 6.9% in the fourth quarter, a notable jump following the 2.3% increase in the third quarter, the Commerce Department said Jan. 27. Economists had estimated the GDP would expand at a 5.5% annual rate in the fourth quarter, according to the Wall Street Journal.
“The acceleration in real GDP in the fourth quarter primarily reflected an upturn in exports, accelerations in private inventory investment and PCE, and smaller decreases in residential fixed investment and federal government spending that were partly offset by a downturn in state and local government spending. Imports accelerated,” the Commerce Department said in a release.
In addition, GDP increased 5.7% in 2021, compared to a decrease of 3.4% in 2020, according to the release.
“The increase in real GDP in 2021 reflected increases in all major subcomponents, led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment,” according to the Commerce Department.
Jeanniey Walden, CMO of DailyPay, told GOBankingRates that when the Fed announced yesterday that multiple interest rate hikes are coming, it likely had a pre-read of today’s bullish economic releases.
“GDP growth accelerated to 6.9% in the fourth quarter, providing an exclamation point to the best year of economic expansion since 1984,” Walden said. “Neither omicron’s December surge nor Washington’s failure to pass stimulus was enough to derail consumer spending, which rose 3.3% for the quarter. If that weren’t enough for the Fed, weekly jobless claims declined 30,000 as a fading omicron loosened its grip over the labor market. So with numbers like these, why are 9 out of 10 families reporting their incomes are either lagging or just keeping up with the cost of living? Seven percent inflation will do that, and that is why the Fed is growing more hawkish each time it meets,” she added.
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Earlier this week, the International Monetary Fund (IMF) cut its global growth outlook for 2022, largely reflecting forecast markdowns in the two largest world economies, the U.S. and China, as GOBankingRates previously reported.
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