U.S. GDP & Prices Rise More Than Expected in Q4:21
by:Tom Moeller
|in:Economy in Brief
Summary
- Real GDP growth strengthened by inventory building.
- Private domestic final demand growth picks up slightly.
- Price inflation accelerates.
The economy remained on a firm footing in 2021. Real GDP growth in Q4:21 accelerated to 6.9% (SAAR) from 2.3% in Q3. It was the strongest growth since Q3:20. During all of 2021, growth picked up to 5.7%, the fastest increase since 1984. A 5.5% GDP rise in Q4 had been expected in the Action Economics Forecast Survey.
Inventory accumulation added 4.9 percentage points to Q4 growth following a 2.2 point addition in Q3. The rise was the strongest since Q3:20 and close to the post WWII record. International trade had no effect on growth last quarter after subtractions in the prior five quarters. Exports grew 24.5% (5.3% y/y) while imports rose 17.7% (9.6% y/y).
Domestic final sales growth picked up to 1.9% last quarter (5.3% y/y) from 1.3% in Q3 as consumer spending rose 3.3% (7.1% y/y). Spending on services rose 4.7% (7.1% y/y) as recreation outlays jumped 20.1% (28.7% y/y) and transportation spending surged 20.2% (30.2% y/y). Housing & utilities spending edged 0.2% higher (1.0% y/y). Spending on durable goods rose 1.6% (6.4% y/y) including a 6.6% decline (-4.0% y/y) in motor vehicle buying and an 11.8% surge (13.3% y/y) in spending on recreational goods. Nondurable goods spending eased 0.1% (+7.7% y/y) as apparel outlays fell 2.4% (+16.1% y/y).
Business fixed investment grew 2.0% last quarter (6.3% y/y) after rising 1.6% in Q3. Structures investment fell 11.4% (-3.5% y/y) but equipment outlays rose 0.8% (5.9% y/y). Investment in intellectual property strengthened 10.6% (11.9% y/y) in Q4.
Residential investment outlays weakened 0.8% in Q4 (-2.2% y/y) after falling sharply in the prior two quarters.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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