US fourth-quarter GDP growth best since 1984

Washington — US economic growth accelerated in the fourth quarter as businesses replenished depleted inventories to meet strong demand for goods, helping the nation to post its best performance in nearly four decades in 2021.

Growth in 2021 was fuelled by huge fiscal stimulus, as well as very low interest rates. The momentum, however, appears to have faded by December amid an onslaught of Covid-19 infections, fuelled by the Omicron variant, which contributed to undercutting spending as well as disrupting activity at factories and services businesses.

The sharp rebound in growth last year could offer some cheer for US President Joe Biden whose popularity is falling amid a stalled domestic economic agenda after the US Congress failed to pass his signature $1.75-trillion Build Back Better legislation. It, however, diminishes prospects of more money from the government.

Growth last quarter was also lifted by a jump in consumer spending in October before retreating considerably as Omicron spread across the country. Consumer spending, which accounts for more than two-thirds of economic activity, has been hampered by shortages of motor vehicles and other goods. A global chip shortage is hurting production.

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