U.S. Economy Grew At The Fastest Rate Since 1984 Last Year

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U.S. Economy Grew At The Fastest Rate Since 1984 Last Year
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Topline

Despite lingering covid disruptions, the economy grew a better-than-expected 6.9% in the fourth quarter thanks to increases in consumer spending, exports and private investments—notching the fastest growth rate in nearly 4src years after the unprecedented pandemic drawback in 2src2src, the government said Thursday.

GDP accelerated at a rate of 5.7% last year after its unprecedented decline in 2src2src.


AFP via Getty Images

Key Facts

Real gross domestic product beat expectations averaging 5.5% due primarily to increases in exports, personal consumption and nonresidential investments, according to an estimate by the Bureau of Economic Analysis on Thursday.

For the year, economic growth accelerated at a rate of 5.7%—the highest showing since 1984 after a 3.4% decline in 2src2src, the government said.

Inventory investments by motor vehicle dealers and widespread increases in exports—such as industrial supplies, food and beverages—were among factors leading economic growth despite offsets from minor decreases in federal, state and local government spending.

Key Background

Widespread covid lockdowns led to the U.S. economy’s worst annual performance since World War II last year. However, many restrictions were lifted this year as vaccinations became widely available to the public—ushering in a massive boom in business that triggered supply shortages and contributed to rapid inflation. Despite the economy’s better-than-expected performance last year, the International Monetary Fund cautioned on Tuesday that the economy would grow more slowly in 2src22 due to lingering supply chain constraints, the Federal Reserve’s removal of pandemic-era stimulus and the increasingly diminished likelihood that President Joe Biden will pass his $1.2 trillion social spending package, Build Back Better.

Further Reading

IMF Warns Economic Recovery Will Be Worse Than Expected After US Inflation Surge And China Covid Disruptions (Forbes)

Fed Readies March Interest-Rate Hike To Fight Inflation Surge Despite Stock Market Plunge (Forbes)

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