Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

US economy sees strongest growth since 1984 as it bounces back after COVID-19 downturn

US economy sees strongest growth since 1984 as it bounces back after COVID-19 downturn

Ronald Reagan was in the White House and Beverly Hills Cop was showing in cinemas the last time the world's biggest economy recorded such a strong pace of growth.

The US grew at its strongest pace since 1984 last year as it bounced back from 2020's pandemic-driven downturn, official figures show.

GDP in the world's biggest economy expanded by 5.7% in 2021 after shrinking by 3.4% the year before, according to America's bureau of economic analysis.

It has not enjoyed such strong one-year growth since when Ronald Reagan was in office and Beverly Hills Cop was on at the cinema nearly four decades ago.

The US economy shrank in 2020


The strength of the recovery picked up in the final quarter of 2021 - to an annualised pace of 6.9% - as firms stocked up to meet high demand.

But economists expect it to have slowed at the start of this year reflecting the impact of the Omicron variant.

Households will also not benefit from pandemic-era government cash boosts this year while the Federal Reserve has signalled interest rates starting to rise from March, which could also cool growth.

For 2021 as a whole, consumer spending bounced by 7.9% and there was a 9.5% increase in private investment.

But there have already been signs of the brakes being applied to the recovery, with retail sales dipping by 1.9% in December.

The GDP figures come a day after Fed chair Jerome Powell said that "the economy no longer needs sustained high levels of monetary policy support" and the central bank said a rate rise would soon be appropriate.

Fed chair Jerome Powell said the economy no longer needs sustained high levels of monetary support


America has recovered more quickly than other countries from the damage inflicted to GDP by COVID-19 and had already bounced back to pre-pandemic levels by the middle of last year.

But with supply strains as demand returns and wages climbing, official figures also point to another economic indicator - inflation - at a near four-decade high.

Consumer prices were up 7% year-on-year in December, the highest since 1982.

The inflation surge is likely to spur the Fed into action, with Mr Powell warning that the outlook for prices had even become "just a bit worse" recently.

Markets are now betting that the US central bank will hike rates four times this year.

The International Monetary Fund predicts that economic growth will slow to 4% for 2022.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
Italy Faces Population Decline Amid Youth Emigration
Trump Accuses China of Violating Trade Agreement
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Russia Accuses Serbia of Supplying Arms to Ukraine
Gerry Adams Wins Libel Case Against BBC
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
EU Majority Demands Hungary Reverse Anti-LGBTQ+ Laws
Top Hotel Picks for 2025 Stays in Budapest Revealed
Iron Maiden Unveils 2025 Tour Setlist in Budapest
Chinese Film Week Opens in Budapest to Promote Cultural Exchange
Budapest Airport Launches Direct Flights to Shymkent
Von der Leyen Denies Urging EU Officials to Skip Budapest Pride
Alcaraz and Sinner Advance with Convincing Wins at Roland Garros
EU Ministers Lack Consensus on Sanctioning Hungary Over Rule of Law
EU Nations Urge Action Against Hungary's Pride Parade Ban
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
U.S. Considers Withdrawing Troops from Europe
Russia Deploys Motorbike Squads in Ukraine Conflict
Critics Accuse European Court of Human Rights of Overreach
Spain Proposes 100% Tax on Non-EU Holiday Home Purchases
German Intelligence Labels AfD as Far-Right Extremist
Geert Wilders Threatens Dutch Coalition Over Migration Policy
Hungary Faces Multiple Challenges Amid EU Tensions and Political Shifts
Denmark Increases Retirement Age to 70, Setting a European Precedent
Any trade deal with US must be based on respect not threats', says EU commissioner
UK Leads in Remote Work Adoption, Averaging 1.8 Days a Week
Thirteen Killed in Russian Attacks Across Ukraine
High-Profile Incidents and Political Developments Dominate Global News
Netanyahu Accuses Western Leaders of 'Emboldening Hamas'
Ukraine and Russia Conduct Largest Prisoner Exchange of the War
×