by Harry Wilmerding
The U.S. economy grew at a faster rate than was anticipated pace in the fourth quarter of 2021, benefiting from solid consumer demand before the slowdown caused by the Omicron coronavirus variant and supply chain disruptions.
U.S. Gross Domestic Product (GDP) grew 6.9% on a year-over-year basis in the fourth quarter of 2021, a 2.3% increase from the third quarter figure, the Commerce Department announced Thursday. Economists surveyed by The Wall Street Journal estimated that U.S. GDP would grow at a just 5.5% annual rate.
Strong consumer spending helped boost growth as Americans shopped for the holiday season earlier than in previous years amid growing concerns of inventory shortages. Personal consumption increased 3.3% in the fourth quarter compared to the third quarter’s 2% jump, according to the Commerce Department.
“The increase in real GDP primarily reflected increases in private inventory investment, exports, personal consumption expenditures (PCE), and nonresidential fixed investment that were partly offset by decreases in both federal and state and local government spending,” the Commerce Department said in the report.
In total, 2021 highlighted the fastest pace of economic growth in nearly five decades, with output growing 5.5% in the fourth quarter compared to the same time period one year prior, the WSJ reported. Thursday’s figure was the highest output gain since 1984 when the figure surged to 5.6%.
Meanwhile, the International Monetary Fund (IMF) slashed its 2022 global economic forecast, saying recovery faces many obstacles, including supply chain disruptions, surging inflation and rising COVID-19 cases. The IMF projected that the U.S. economy would grow just 4% in 2022, a 1.2% decrease from its previous estimate.
– – –
Harry Wilmerding is a reporter at Daily Caller News Foundation.