US GDP growth in 2021, according to preliminary calculations, amounted to 5.7%, according to the data of the country’s Ministry of Commerce. This is the largest annual growth of the country’s economy since 1984, notes Bloomberg. In the fourth quarter, US GDP grew by 6.9% after rising by 2.3% in the third quarter. This is higher than the initial forecasts of the authorities, who believed that growth in the last quarter of last year would be 4.9%, the agency writes.
The positive dynamics is due to the low base in 2020. Then the US GDP fell by 3.4%, which was the largest drop since the end of World War II.
A significant share in the growth of the American economy is traditionally brought by consumer spending. Over the past year, they amounted to two thirds of GDP and increased by 3.3% in the fourth quarter. The main increase occurred in October-November, as the Americans completed pre-New Year purchases in advance due to serious supply disruptions. In December, spending growth slowed sharply and was the worst month for US retail sales since February last year, the Commerce Department said earlier. Retail sales fell 1.9% despite December being traditionally high season.
In addition, the decrease in purchasing power was associated with the spread of a new strain of coronavirus omicron, as well as high inflation, which at the end of last year was 7.04%, reaching a maximum since 1982. The target, which the Federal Reserve System (Fed), is 2%.
On January 26, the Fed kept the base rate at 0-0.25%. Fed chief Jerome Powell said the regulator will accelerate the cuts in the quantitative easing program and will likely raise the base rate at the next meeting in March to combat inflationary pressures, which he says are still high.