Real GDP growth accelerated in the fourth quarter of 2021 despite omicron’s spread. This quarter’s growth reflected strong gains in private inventory investment and consumer spending.
According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) increased at an annual rate of 6.9% in the fourth quarter of 2021, after a disappointing 2.3% increase in the third quarter of 2021. This quarter’s growth rate matched NAHB’s forecast.
For the full year of 2021, real GDP grew at a 5.7% annualized rate, also matching NAHB’s annual forecast. It marked the fastest growth rate since 1984. In 2020, the COVID-19 pandemic, and its associated policy response, plunged the U.S. economy into the worst contraction since 1946 as real GDP declined 3.4%.
The increase in real GDP in the fourth quarter of 2021 reflected increases in private inventory investment, exports, and personal consumption expenditures (PCE). Meanwhile, the increase in imports, which are a subtraction in the calculation of GDP, and decreases in both federal and state and local government spending had negative contributions to economic growth in the fourth quarter of 2021.
The acceleration in real GDP in the fourth quarter primarily reflected accelerations in
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