Congresswoman Jody Hice, R-Ga., Evaluates the stimulation of the coronavirus, opening up the US economy, the Biden administration suspending the Keystone XL pipeline, building the wall on the southern border and National Guard troops in DC
The economic recovery in the United States after the coronavirus shutdown slowed sharply in the last three months of the year, as the country was unable to recover all losses from the COVID-induced recession.
Gross domestic product, the broadest measure of goods and services produced across the economy, grew 4% on an annualized basis over the three-month period from October to December, the Commerce Department said in its first reading of the data on Thursday. market.
Refinitiv economists expected the report to show that the economy had expanded by 4%.
The economy grew at a revised annual rate of 33.4% in the previous quarter, a record pace as companies reopened after an unprecedented blockade.
FEEDING NEAR ZERO AMID FEES FRESH SIGNS US ECONOMIC RECOVERY IS TURNING OFF
But the headline number often obscures the whole picture, because the Commerce Department calculates GDP on a quarter-by-quarter basis, as if that level of growth were sustained for an entire year; in times of large up or down swings, it can exaggerate both the decline in growth and the subsequent recovery.
Looking at quarterly data, the country’s GDP grew 1% from the third to the fourth quarter, compared to a 7.48% increase between the second and third quarters, marking a substantial slowdown as a resurgent virus forced a new wave of company closings and blocking measures.
Growth in the second half of the year was not enough to compensate for the sharp slowdown in the first few months, when the United States economy nearly stalled to slow the spread of the virus, which infected more than 25 million Americans and killed more than 429,000, the biggest in the world.
The economy remains 2.46% lower than at the end of 2019. Measuring overall production in 2020 compared to the previous year, GDP fell 3.5% in 2020, the worst on record.
CAN DEMOCRATS PASS THE $ 1.9T BIDEN CORONAVIRUS RELIEF ACCOUNT WITHOUT THE REPUBLICANS?
“The report reflects an economy still dictated by the pandemic manual,” said Michael Reynolds, director of investment strategy at Glenmeade. “One of the biggest contributors to GDP in the fourth quarter was spending on health, while restaurants and food services were a notable detractor due to renewed COVID-19 restrictions across the country, as well as the fact that outdoor dining have become unsustainable due to the colder climate in some parts of the country. “
The fainting of the economy induced by the coronavirus, illustrated by the decline in GDP in the second quarter, undermined once vibrant growth. With the economy reopening in the second half of the year, growth has recovered, fueled in part by trillions of dollars in government government aid and a resurgence in consumer spending, which accounts for about two-thirds of the country’s GDP.
STIMULUS CHECKS AND THEIR TAXES FOR 2020: ALL YOUR QUESTIONS, ANSWERED
Although the recovery has stabilized this winter, economists expect it to heat up later, in 2021, when the vaccine is widespread and the virus is under control. President Biden is also pressing Congress to approve a $ 1.9 trillion aid package – in addition to the $ 900 billion in spending that lawmakers approved in December – which includes a third round of $ 1,400 stimulus checks , supplementary unemployment benefits through September, $ 350 billion in financing for state and local governments and $ 20 billion for vaccine distribution.
“There is nothing more important to the economy now than people being vaccinated,” Federal Reserve President Jerome Powell told reporters during a news conference on Wednesday. “This is really the main thing about the economy, it is keeping the pandemic in check, vaccinating everyone, getting people to wear masks and everything. This is the most important economic growth policy we can have. ”