US GDP expands 6.9% in Q4

The US economy rounded out 2021 by expanding at a healthy 6.9% annual clip between October and December, according to the Bureau of Economic Analysis, a slight downgrade from the government's previous estimate of 7%.

For the year as a whole, US gross domestic product, its total output of goods and services, jumped 5.7% for the fastest calendar-year growth seen since 1984's 7.2% surge in the wake of a recession.

The small downgrade from the Commerce Department's original estimate came as a result of a smaller-than-expected increase in consumer spending and fewer exports.

However, moving forward, growth was predicted to slow sharply in 2022, most notably in the first quarter, as higher inflation will likely weigh on consumer spending and a move by the Federal Reserve to start pushing up borrowing costs, leading to a sharp increase in mortgage rates, was predicted to result in a decline in home sales. Exports may also weaken due to overseas economies being disrupted by Russia's invasion of neighbouring Ukraine.

Economists have forecast that growth could fall to as low as 0.5% in the first quarter of 2021 and could possibly even slip into negative territory, while the Federal Reserve expects to see the US economy expand 2.8% this year, much lower than seen in 2021.