The numbers: The U.S. economy sped up toward the end of 2021 before a late omicron surge, expanding at an annual 6.9% pace as consumers spent more and businesses stocked back up.
Economists polled by The Wall Street Journal had forecast gross domestic product to rise by 5.5% in the fourth quarter. GDP grew a slower 2.3% in the third quarter.
Aided by massive government stimulus spending, GDP increased by 5.7% for the full year. That’s the biggest increase since 1984.
Big picture: The U.S. economy, harried first by delta and then by omicron, has grown in fits in starts since last summer.
Yet Americans have plenty of savings and businesses say demand is as high as ever. Economists predict the U.S. will grow strongly again — around 4% or so — in 2022 despite the end of government stimulus, especially if the coronavirus is kept at bay.
The chief obstacles? Ongoing shortages of labor and supplies that have boosted inflation to a nearly 40-year high. The Federal Reserve is also on the cusp of raising interest rates for the first time in four years to combat the spike in prices.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open higher in Thursday trades. Stocks fell the day before after the Fed indicated it could raise interest rates as early as March.
