The U.S. economy grew 6.9% in the fourth quarter of 2021, up from the 2.3% gain in the third quarter, and real GDP in the manufacturing sector soared by an annualized 10.9% in the same period, according to the U.S. Department of Commerce.
Source of the jump: Real GDP growth came almost wholly from service-sector purchases and inventory spending, with the negative impacts of supply chain bottlenecks and COVID-19 still apparent on the consumer side.
Robust rebound: Manufacturing’s jump is up from a third quarter that saw a 1.5% decline. Also in manufacturing:
- Value-added output increased from $2.571 trillion in the third quarter to $2.714 trillion in the fourth quarter, which is an all-time high.
- Real value-added output increased from $2.320 trillion at the annual rate in the third quarter to a record $2.381 trillion in the fourth quarter, as expressed in chained 2012 dollars.
- Manufacturing gross output increased from $6.441 trillion in the third quarter to a record $6.718 trillion in the fourth quarter.
The NAM’s take: “Overall, the U.S. economy rebounded very strongly in 2021, with real GDP soaring 5.7% following the 3.4% decline in 2020,” said NAM Chief Economist Chad Moutray.
- “However, in the first (or current) quarter, growth will be just 1.0%, largely on omicron, supply chain and pricing pressure challenges. The events in Russia and Ukraine pose a notable downside risk to global growth, already subtracting 0.5% in forecasted growth this year in the U.S., and the full extent of the threat will hinge on what happens moving forward.”