US & World

US revise fourth quarter GDP estimate to just 7% | Jobs

Washington (AP) — The US economy expanded at a vigorous 7% annual rate from October to December and ended in 2021.

Throughout 2021, gross domestic product (gross domestic product and services) increased by 5.7%. This is the fastest growth in the calendar year since the 7.2% surge in 1984 following the aftermath of the brutal recession.

But so far this year, the economic outlook has been considerably bleak in the face of accelerated inflation, rising borrowing rates, financial market instability and the potential for serious military conflicts due to Russia’s invasion of Ukraine. increase.

Supply chain disruptions, which are short of parts and products, are also disrupting businesses. And this year’s American households will not be able to receive the government’s stimulus measures like last year. This is the money that helped drive active personal consumption in 2021.

The International Monetary Fund estimates that the US economy will slow to 4% growth this year. But if the Fed’s future rate hikes significantly slow American borrowing and spending, the economy could be further weakened.

The Fed’s ultra-low interest rates have helped to expand rapidly following the 2020 pandemic recession. However, high inflation is expected to reverse the course and start a series of rate hikes next month.

Russia’s invasion of Ukraine and the potential impact on global energy markets also add to the uncertainty surrounding the economic outlook.

Economic growth in the final quarter of 2021 was due to a 33.5% surge in corporate investment as companies worked to replenish their inventories. In fact, inventory replenishment accounted for 70% of Q4 growth.

Also, increased corporate investment and state and local government spending contributed to improved growth forecasts for the October-December quarter, slightly offset by weaker consumer spending.

Throughout 2021, consumer spending surged 7.9%, the fastest growth since 1946. However, as the increase in coronavirus cases is now declining, it slowed to an annual rate of 3.1% in the October-December quarter, keeping more Americans at home, restaurants, travel destinations, and entertainment. It is far from the facility.

Copyright 2022 AP communication. all rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.



US revise fourth quarter GDP estimate to just 7% | Jobs

Source link US revise fourth quarter GDP estimate to just 7% | Jobs

Related Articles

Back to top button