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GDP and Stocks Report: Live Updates

Continuing to recover from the shocks of the pandemic, the country’s economy grew 1.7% in the last three months of 2021, the Commerce Department announced on Thursday.

This figure, adjusted for inflation, reflects growth in gross domestic product – the broadest measure of goods and services produced. On a year-over-year basis, the increase for the quarter was 6.9%.

For the full year, economic growth was 5.7%, the largest since 1984 – an impressive achievement, although one that also reflects the extent of the damage caused by the coronavirus the previous year.

The fourth quartile is, to some extent, a respite between coronavirus waves. It started as the Delta variation was easing and the impact of Omicron started to be felt only in the final weeks. Economists expect Omicron to be a drag on the economy in January and much of February. But they say activity will normalize as the variation fades and spring approaches.

The strong growth in the fourth quarter was driven in part by consumer spending, “primarily reflecting an increase in services, led by health care, entertainment and traffic,” said the Ministry of Commerce. Private investment and inventory growth were also key factors.

“This is really powerful data,” said Jane Oates, an Obama-era assistant secretary of labor and president of Working Nation, a nonprofit group focused on employment issues. The increase in inventory “shows at least a growing improvement in the supply chain,” she said.

Consumer spending and private investment have revived after the initial pandemic as a result of vaccination efforts, cheap credit conditions and additional waves of federal aid for households and businesses. The labor market has restored nearly 19 million out of 22 million jobs loss near the peak of virus-induced inactivity.

Initial momentum provided by government stimulus and a post-vaccine resurgence in many sectors is expected to wane, and The Federal Reserve is planning to use its policy tools in the coming months to take control inflationaryDecember hit a 40-year high.




Level the economy on the right track

for a pre-pandemic approach.

Trend line of

Qtr 1. 2015 to

Wednesday Qtr. 2019

Adjusted for inflation and

seasonality, with an annual rate

Level

the economy is

On the way

achieved first

epidemic.

Trend line of

Qtr 1. 2015 to

Wednesday Qtr. 2019

Adjusted for inflation and

seasonality, with an annual rate


“Fiscal and monetary policy is committed to supporting a positive economy in times of crisis,” said Julia Coronado, a former Federal Reserve economist and professor of finance at the University of Texas at Austin. translation and it worked. “Not only did we meet our goal of shortening the recession,” she said, “we exceeded all expectations” in terms of the rate of re-employment.

Most recently this past February, the Congressional Budget Office guess that it could take until 2024 to reach the current unemployment rate of 3.9%, down from a peak of 14.7% in April 2020.

President Biden hailed the year’s economic growth and jobs as proof that his policies are paying off. “My first year GDP numbers show that we are ultimately building an American economy for the 21st century,” he said in a statement Thursday.

But the recent economic recovery has been overshadowed by the highest inflation rate since 1982. Consumer prices have risen – have reached 7% for the year to December – began to strengthen in the spring when demand was so tight, the supply network was fragmented by the pandemic.

Import prices, for example, 10.4% higher in December a year earlier, according to the Labor Department. Many businesses, large and small, are bracing for such supply chain problems that will linger beyond the summer – an unwelcome sign for workers whose wages are growing at the fastest pace in the past year. decades, while consumer purchasing power is diminished by more expensive goods.




Percent change in

gross domestic product

Since last quarter

before the pandemic

Percent change in

gross domestic product

Since the previous last quarter

epidemic


ONE Gallup survey conducted this month found that Americans view the economy more negatively than positively – only 29% say the economy is improving, while 67% believe it is getting worse.

However, 72% say it’s a good time to find a quality job.

“It’s all about what you prioritize,” said Allison Schrager, an economist and senior fellow at the Manhattan Institute, a conservative organization. Policymakers in Washington have made the wrong decision to provide too much pandemic aid instead of too little – and Ms. Schrager is among analysts who say the trade-off of that decision is becoming clearly. If there were less stimulus, she said, “inflation wouldn’t be as bad as it is right now.”

At a press conference on Wednesday, Jerome H. Powell, the Fed chair, acknowledged that “bottlenecks and supply constraints are limiting the rate at which production can respond to higher demand in time to come” and “these problems are bigger and longer lasting than anticipated. ”

As analysts study the direction and extent of price increases this year, many see the spring months as a pivotal time, said Ellen Zentner, managing director and chief US economist at Morgan Stanley. This is partly because the Consumer Price Index reports for March and April this year will provide the first relatively stable year-to-year comparisons that experts will see in three years: 2020 data. coincides with the pre-pandemic normal of 2019; Reports in 2021 after the economy reopens are measured against the unusual environment, the partial recession of the economy has no vaccine in 2020.

“The hope is that that will change as we move into the second quarter,” Ms. Zentner said. And high single-digit inflation “didn’t last much longer.”

During quarterly earnings calls, JPMorgan Chase and Bank of America, which serve 140 million households in total, reported that families’ finances are technically better than they were before the pandemic. Bank of America says its customers spent a record $3.8 trillion in 2021, up 24% from 2019 levels. But analysts note that dwindling savings and continued price increases – along with any new coronavirus variants – could limit consumption.

Thursday’s report indicates that the cash reserves many Americans may have accumulated during the pandemic continue to decline: Actual personal disposable income fell 5.8% in the fourth quarter, and the personal savings rate – the percentage of overall disposable income that reduces savings each month – was 7.4%, compared with 9.5% in the third quarter.

even though Factory production rose 3.5 percent in December from a year earlier, manufacturing output fell 0.3% last month, a lower-than-most forecast. The spread of the Omicron variant appears to be prolonging manufacturers’ struggle to find suitable workers, as the infection leaves sick people absent. With businesses outbid to take the lead in supplying the parts that make up their finished products, shortages of raw materials for hard-to-source components, such as computer chips, also remain a problem. a headache.

Shipments of core capital goods – a popular measure of business investment in US equipment spending – surged 1.3% in the fourth quarter, but were flat in December. Industry analysts are highlighting broader quarterly trends as an indication that the private sector believes strong growth will survive both inflationary pressures and the deceleration associated with variations in coronavirus.

The “average business owner” sees a very strong environment right now, said Oren Klachkin, lead economist for US industry and regional studies at Oxford Economics. “They want to increase investment because they want to fill that need – and they have every reason to invest.”

The International Monetary Fund, citing tighter Fed policy and expected to halt any stimulus spending by Congress, this week cut US growth forecast for 2022 up 1.2 percentage points to 4 percent – although that increase would still be higher than the annual average from 2010 to 2019.

Ben Casselman contribution report.

https://www.nytimes.com/live/2022/01/27/business/stock-market-economy-news GDP and Stocks Report: Live Updates

Fry Electronics Team

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