Nation & World Glance
US economy grew 5.7% in 2021 in rebound from 2020 recession
WASHINGTON — The U.S. economy grew last year at the fastest pace since Ronald Reagan’s presidency, bouncing back with resilience from 2020’s brief but devastating coronavirus recession.
The nation’s gross domestic product — its total output of goods and services — expanded 5.7% in 2021. It was the strongest calendar-year growth since a 7.2% surge in 1984 after a previous recession. The economy ended the year by growing at an unexpectedly brisk 6.9% annual pace from October through December as businesses replenished their inventories, the Commerce Department reported Thursday.
“It just goes to show that the U.S. economy has learned to adapt to the new variants and continues to produce,’’ said Beth Ann Bovino, chief economist at Standard & Poor’s Global Ratings.
Squeezed by inflation and still gripped by COVID-19 caseloads, the economy is expected to slow this year. Many economists have been downgrading their forecasts for the current January-March quarter, reflecting the impact of the omicron variant. And for all of 2022, the International Monetary Fund has forecast that the the nation’s GDP growth will slow to 4%.
Many U.S. businesses, especially restaurants, bars, hotels and entertainment venues, remain under pressure from the omicron variant, which has kept millions of people hunkered down at home to avoid crowds. Consumer spending, the primary driver of the economy, may be further held back this year by the loss of government aid to households, which nurtured activity in 2020 and 2021 but has mainly expired.
Growth last year was driven up by a 7.9% surge in consumer spending and a 9.5% increase in private investment.
For the final three months of 2021, consumer spending rose at a more muted 3.3% annual pace. But private investment rocketed 32% higher, boosted by a surge in business inventories as companies stocked up to meet higher customer demand. Rising inventories, in fact, accounted for 71% of the fourth-quarter growth.
“The upside surprise came largely from a surge in inventories, and the details aren’t as strong as the headline would suggest,’’ Kathy Bostjancic, Oxford Economics’ chief U.S. financial economist, said in a research note.
Coast Guard suspends search for migrants off Florida
MIAMI BEACH, Fla. – The Coast Guard said it suspended its rescue operations at sunset Thursday after announcing earlier that afternoon that it had found four additional bodies in its search for dozens of migrants lost at sea off Florida.
Homeland Security Investigations officials have said they were actively investigating the case as a human smuggling operation.
Authorities have now found a total of five bodies, leaving 34 missing five days after the vessel capsized on the way to Florida from Bimini, a chain of islands in the Bahamas about 55 miles (88 kilometers) east of Miami.
Coast Guard Capt. JoAnn F. Burdian said earlier the decision to suspend the search was not an easy one.
“We have saturated the area over and over again,” she told a news conference. “We’ve had good visibility. ... We’ve overflown the vessel a number of times . ... It does mean we don’t think it’s likely that anyone else has survived.”