US gross domestic product continued to expand in Q4, as expected

America's economy continued expanding at the tail-end of 2020 with economists anticipating that the rebound from the Covid-19 crisis was set to continue.

According to the US Department of Commerce, US gross domestic product grew at an annualised pace of 4.0% over the three months ending in December (consensus: 4.1%).

All told, over the front half of 2020, US GDP suffered a peak-to-trough decline of 10.1%, followed by a rebound of 8.5% across the last six months of the year which left economic activity running 2.5% below its pre-pandemic level.

Commenting on Thursday's GDP figures, Gregory Daco at Oxford Economics told clients that little could be inferred from the in terms of the outlook.

Nevertheless, Daco's forecasts called for a reacceleration in GDP growth over 2021 for a full-year pace of expansion nearer 5.5%, with the economic set to reclaim its pre-pandemic size in the second quarter.

"Against the risk of excessive winter pessimism, we believe in spring optimism," he said.

"We foresee record-breaking consumer spending growth in 2021 with households benefiting from a watered-down $1.2tn version of Biden’s American Rescue Plan, vaccine diffusion gradually reaching two thirds of Americans by July and employment accelerating this spring."