US GDP grew at a rate of 5.7% in 2021

The gross domestic product (GDP) of the United States grew by 5.7% throughout 2021, the largest increase since 1984, according to a preliminary estimate from the Department of Commerce published this Thursday.

In the fourth quarter, annualized growth was 6.9%, a figure much higher than analysts had expected, predicting 5.6%.

Last year’s growth was stronger than expected by the US Federal Reserve, which expected a 5.5% recovery, and also exceeded the rate projected by the International Monetary Fund (IMF), which is 5.6 % expected.

On top of that, household consumption, which accounts for nearly three-quarters of the U.S. economy, increased by 7.9% last year, and business investment in the country by 9.5%.

“Consumers spend without saving to alleviate the monotony of quarantine, renovate their homes and allow themselves to travel,” summed up Grant Thornton economist Diane Swonk.

In turn, “companies have invested heavily in technology to support the migration from face-to-face activities to online activities, including work from home,” he added.

In 2020, the Covid-19 crisis caused a GDP contraction of 3.4% in that country.

Injection of stimuli against Covid-19

The growth of the US economy was boosted early last year by massive stimulus packages that boosted consumer spending and then by a spring vaccination campaign.

In the first quarter, the world’s largest economy grew at an annualized rate of 6.3% and in the second 6.7 percent. Between April and June, it returned to its pre-pandemic level.

But in the third quarter of 2021, growth slowed and the expansion was 2.3% due to the appearance of the Delta variant of the coronavirus.

Expectations for 2022

Growth is now expected to slow in the first quarter of 2022, plagued by the new Omicron variant which caused a massive wave of infections, which reduced economic activity.

Consumer prices rose sharply last year and are a concern for the Joe Biden administration.

According to the Consumer Price Index of the Department of Commerce, the one that the central bank considers the most, it had a 3.9% increase in 2021.

But the other inflation index, the one prepared by the Department of Labor, published on January 12, reported a price increase of 7% in 2021, which would be the largest increase in 12 months since June 1982.



Reference-www.eleconomista.com.mx

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