U.S. gross domestic product grew at an annualized rate of 4% in the fourth quarter, according to new data released by the Commerce Department Thursday—slightly less than what economists were expecting and a sharp contraction from the previous quarter, when GDP grew at
—as the economic rebound lost steam amid a winter surge in Covid-19 cases and the expiration of federal pandemic rescue legislation.Consumer spending fell sharply during October, November, and December as the virus continued to spread and businesses closed, but spending on manufacturing and housing picked up to offset some of those losses.
That drop in spending is also related to stubbornly high unemployment levels, which have improved from the early days of the pandemic but remain incredibly elevated by historical standards.Crucial Quote “The report reflects an economy still dictated by the pandemic playbook – one of the larger contributors to Q4 GDP was healthcare spending, while restaurants and food service were a notable detractor due to renewed COVID-19 restrictions across the country,” Glenmede investment strategy officer Michael Reynolds said.
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