US GDP growth in 2021 fastest since 1984 but Omicron threat looms

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US GDP growth in 2021 fastest since 1984 but Omicron threat looms thesun thesundaily Omicron Covid19 USGDPGrowth

A worker delivers goods at a grocery store in Fairfax Virginia. After contracting in 2020, US economic growth rebounded to 5.7% in 2021, the second year of the Covid-19 pandemic. – AFPPIXThe 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.

After the downturn in 2020, US gross domestic product expanded by 5.7% last year, the Commerce Department said in its latest quarterly report. “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.

“This is no accident,” Biden said. “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.” The Fed 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.

But Peterson told reporters growth should bounce back in the second quarter and even with multiple rate increases the Fed's interest rate would still be only 1.25%.

 

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