US real GDP rises at annual rate of 7% in Q4 2021: BEA

The increase in real GDP primarily reflected increases in private inventory investment, exports and non-residential fixed investment that were partly offset by decreases in both federal and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The increase in Q4 2021 GDP reflected the continued economic impact of the COVID-19 pandemic. In the quarter, COVID-19 cases resulted in continued restrictions and disruptions in the operations of establishments in some parts of the United States.

Government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased as provisions of several federal programmes expired or tapered off.

The increase in private inventory investment was led by retail and wholesale trade industries. Within retail, inventory investment by motor vehicle dealers was the leading contributor. The increase in exports reflected increases in both goods and services, BEA said in a release.

The increase in exports of goods was widespread, and the leading contributors were consumer goods, foods, feeds and beverages, as well as industrial supplies and materials. The increase in exports of services was led by travel.

The decrease in federal government spending primarily reflected a decrease in defense spending on intermediate goods and services. The decrease in state and local government spending reflected a decrease in gross investment (led by new educational structures).

The increase in imports primarily reflected an increase in goods (led by non-food and non-automotive consumer goods, as well as capital goods).

Real GDP accelerated in the fourth quarter of last year, increasing by 7 per cent after increasing by 2.3 per cent in the third. The acceleration in real GDP primarily reflected upturns in exports and residential investment, and accelerations in private inventory investment and consumer spending, that were partly offset by a downturn in state and local government spending. Imports accelerated.

Fibre2Fashion News Desk (DS)