A strong fourth quarter buoyed the economy as the GDP expanded by 5.7% in 2021, which is the fastest pace since it grew by 7.2% in 1984. While the economy grew at an annualized rate of 2.3%, it jumped by 6.9% in the final four months of the year.
The growth in 2021 was driven by an increase in private investments and consumer spending, which increased by 9.5% and 7.9%, respectively.
“Fiscal and monetary policy committed to supporting the economy aggressively during the pandemic, and it worked,” Julia Coronado, a former Federal Reserve economist and a professor of finance at the University of Texas at Austin, told the New York Times. “Not only did we meet the goal of shortening the recession,” she said, “we exceeded all expectations” on the speed of re-employment.
Economists predict that the economy will continue to grow in 2022, though they expect it to be at a slower pace as the country continues to deal with the coronavirus pandemic, rising inflation, and the end of pandemic-related stimulus money.