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GDP rebounded and grew in fourth quarter of 2021
The Commerce Department Thursday released its first estimate of economic activity for the fourth quarter of 2021, which showed the U.S. economy rebounded from the third quarter and grew by 6.9 percent. In a new NAFCU Macro Data Flash report, NAFCU’s Curt Long mentioned that this quarter’s rise represents a return to "its pace over the first half of the year."
"The biggest factor behind the improved growth rate was inventory build, which accounted for over 70 percent of the total rise in quarterly GDP," said Long, NAFCU's chief economist and vice president of research. "Auto dealers led the way, which is a good sign that some of the supply chain-related shortages in that industry may be easing.
"Consumption improved at a modestly faster pace than in the prior quarter, with most of the improvement located in the services sector," added Long. "Durable goods spending increased by 18 percent in 2021, but by only 1.6 percent in the fourth quarter."
According to the estimate, major contributions to real GDP came from gross private domestic investment (+5.2 percent), followed by personal consumption (+2.3). Net exports remained flat while government consumption fell by 0.5 percent.
PCE inflation, the Fed's preferred inflation metric, rose 6.5 percent. Meanwhile, core PCE inflation, excluding food and energy, rose 4.9 percent.
"First quarter growth faces more headwinds, including the Omicron variant, drags in fiscal spending, and jittery financial markets," Long concluded. "NAFCU expects growth to slow, which should ease inflationary pressures."
For more economic updates from NAFCU's award-winning research team, view all of NAFCU's Macro Data Flash reports.