- Canada to further cut international student, foreign worker permits
- YouTube launches new TV-focused tools for creators
- White Sox heading for worst season in MLB history
- China the top challenge in US history: senior diplomat
- Hong Kong democracy tycoon's son warns time running out
- New migraine drugs no better than cheap painkillers: big study
- Sean 'Diddy' Combs again denied bail in sex trafficking case
- Brewers clinch division title as MLB playoff race heats up
- Man City blunted by 'giant' Inter in Champions League stalemate
- US stocks dip despite larger Fed interest rate cut
- Man City held by Inter as PSG pinch win in Champions League
- All Blacks recall Beauden Barrett for Australia Test
- Fears of all-out war as new Lebanon device blasts kill 20, wound 450
- Spurs late show saves Postecoglou blushes at Coventry
- PSG snatch late goal to beat Champions League debutants Girona
- Gittens' late double gives Dortmund Champions League win at Brugge
- Man City blunted by Inter in Champions League stalemate
- Hidden talent: French Olympic star Marchand opts for disguise
- MrBeast named in California lawsuit over 'Beast Games' show
- Gauff splits with Gilbert as coach after 14-month run
- Hundreds of thousands at risk in Sudan's El-Fasher: UN
- Harvey Weinstein pleads not guilty to new sex crime charge
- Venezuelan opposition candidate says letter conceding election was coerced
- Ukraine official claims Russian advance in Kursk has been 'stopped'
- X update allows app to bypass Brazil ban: internet providers
- Fears of all-out war as new Lebanon device blasts kill 14, wound 450
- US Fed makes aggressive rate cut, weeks before election
- Arsenal's Odegaard faces lengthy injury absence
- India coal expansion risks massive methane growth: report
- China the top challenge in US history, top diplomat says
- US Fed makes larger half-point cut in first reduction since 2020
- Ronaldo's Al Nassr appoint former AC Milan boss Pioli
- Ainslie 'relieved' as British book place in Louis Vuitton Cup final
- Struggling Roma replace sacked icon De Rossi with Ivan Juric
- Women's NBA will add 15th team in Portland in 2026
- Brazil fires need harsher punishment: environmental police boss
- Boeing to start large temporary furloughs amid Seattle strike
- Fears of all-out war as new Lebanon device blasts kill nine, wound 300
- 'Emergency' declared over falling UK butterfly numbers
- McIlroy outlines threats to golf peace deal
- Stock markets, dollar slip before US rate decision
- Russian advance in Kursk 'stopped': Ukraine official to AFP
- UN members demand end to 'unlawful' Israeli occupation of Palestinian territories
- Snapchat pushes 'safer' platform image, but not everyone agrees
- Three dead, 100 wounded in new wave of Lebanon device explosions
- So where does the oceans' plastic waste come from?
- Allied war heroes buried in Netherlands... 80 years on
- Marsh coy over Australia's choice to open alongside Head
- New London sculpture pays tribute to trans community
- Lebanon doctors tell of horror after pager blasts
RBGPF | 5.79% | 60.5 | $ | |
GSK | -0.31% | 42.43 | $ | |
CMSC | 0.02% | 25.055 | $ | |
VOD | 0.49% | 10.23 | $ | |
NGG | -0.46% | 70.05 | $ | |
SCS | 0.71% | 14.11 | $ | |
BTI | -0.34% | 37.88 | $ | |
AZN | 0.06% | 78.58 | $ | |
RYCEF | 1.37% | 6.55 | $ | |
RIO | -0.02% | 62.91 | $ | |
RELX | -0.82% | 47.37 | $ | |
BCC | 1.33% | 137.06 | $ | |
BCE | 3.09% | 35.61 | $ | |
JRI | 0.45% | 13.44 | $ | |
BP | -0.37% | 32.43 | $ | |
CMSD | -0.12% | 24.98 | $ |
US economy grew 5.7% in 2021, but Omicron hit looms
The world's largest economy staged a solid recovery last year as it grew at the fastest pace since 1984, but damage from the Omicron variant of Covid-19 still looms.
Surging prices continue to pose a challenge, as inflation picked up speed in the final three months of the pandemic's second year, according to official data released Thursday.
That threatens to dampen the consumer demand that has underpinned the recovery, while supply chain snarls continue to create headaches for businesses, and for President Joe Biden's efforts to return the country to normal.
After the downturn in 2020, US GDP expanded by 5.7 percent last year, the Commerce Department said in its latest quarterly report.
Amid the rise of Omicron in the October-November period, GDP grew 6.9 percent, the data showed. While that topped expectations, economists warn the figure was inflated by businesses' attempts to rebuild depleted inventories.
"The upside surprise came largely from a surge in inventories and the details aren't as strong as the headline would suggest," said Kathy Bostjancic of Oxford Economics.
"What's more, beneath the headline GDP print, the handoff to 2022 is weak. With consumer spending retrenching in December and Omicron dampening economic activity," she said in an analysis.
Ian Shepherdson of Pantheon Macroeconomics agreed, saying the start of the year looks grim: "Our tentative Q1 GDP forecast right now is zero."
But Biden, whose signature social spending bill is stalled in Congress, cheered the report, highlighting "the fastest economic growth in nearly four decades, along with the greatest year of job growth in American history."
And, he said, "for the first time in 20 years, our economy grew faster than China's."
"This is no accident. My economic strategy is creating good jobs for Americans, rebuilding our manufacturing, and strengthening our supply chains here at home to help make our companies more competitive."
- Inflation on the rise -
Ongoing supply snarls and shortages, combined with strong demand for goods fueled by generous government aid, have created a perfect storm of inflationary pressures that have undercut Biden's approval among American voters.
Prices accelerated during the year, peaking in the October-December period with a 6.5 percent surge in the personal consumption expenditures (PCE) price index -- the measure the Federal Reserve focuses on. That was the biggest increase in 40 years.
For the full year, inflation rose 3.9 percent, according to the data, still far above the Fed's two percent goal.
Excluding volatile food and energy prices which have increased sharply in the year, the core PCE price index rose 3.3 percent in 2021, and 4.9 percent in the fourth quarter.
The Federal Reserve on Wednesday issued a clear signal that it plans to begin raising interest rates in March to tamp down inflation, but that also could restrain growth next year.
N.Fournier--BTB