The U.S. economy grew at a rate of 7.0% in Q4, up from the 2.3% gain in the third quarter and inching up from the previous estimate of 6.9% growth, according to the Bureau of Economic Analysis.
Why it’s happening: The data also show negative impacts from ongoing supply chain disruptions and the spread of the omicron virus, with weaker-than-desired spending on consumer goods and business investment. In addition, reduced fiscal stimulus has led to a drag from government for three straight quarters.
The good news: “Overall, the U.S. economy rebounded very strongly in 2021, with real GDP soaring 5.7% following the 3.4% decline seen in 2020,” said NAM Chief Economist Chad Moutray.
- However, growth for the first quarter will be just 1.5% due to the spread of the COVID-19 omicron variant, supply chain issues and pricing pressure challenges.
Looking ahead: “The events in Russia and the Ukraine pose a notable downside risk to global growth, which could impact the outlook moving forward, although the extent of this threat will hinge on what happens in the coming days and weeks,” said Moutray.