Beautiful Virgin Islands

Tuesday, Jun 03, 2025

US economy sees strongest growth since 1984 as it bounces back after COVID-19 downturn

US economy sees strongest growth since 1984 as it bounces back after COVID-19 downturn

Ronald Reagan was in the White House and Beverly Hills Cop was showing in cinemas the last time the world's biggest economy recorded such a strong pace of growth.

The US grew at its strongest pace since 1984 last year as it bounced back from 2020's pandemic-driven downturn, official figures show.

GDP in the world's biggest economy expanded by 5.7% in 2021 after shrinking by 3.4% the year before, according to America's bureau of economic analysis.

It has not enjoyed such strong one-year growth since when Ronald Reagan was in office and Beverly Hills Cop was on at the cinema nearly four decades ago.

The US economy shrank in 2020


The strength of the recovery picked up in the final quarter of 2021 - to an annualised pace of 6.9% - as firms stocked up to meet high demand.

But economists expect it to have slowed at the start of this year reflecting the impact of the Omicron variant.

Households will also not benefit from pandemic-era government cash boosts this year while the Federal Reserve has signalled interest rates starting to rise from March, which could also cool growth.

For 2021 as a whole, consumer spending bounced by 7.9% and there was a 9.5% increase in private investment.

But there have already been signs of the brakes being applied to the recovery, with retail sales dipping by 1.9% in December.

The GDP figures come a day after Fed chair Jerome Powell said that "the economy no longer needs sustained high levels of monetary policy support" and the central bank said a rate rise would soon be appropriate.

Fed chair Jerome Powell said the economy no longer needs sustained high levels of monetary support


America has recovered more quickly than other countries from the damage inflicted to GDP by COVID-19 and had already bounced back to pre-pandemic levels by the middle of last year.

But with supply strains as demand returns and wages climbing, official figures also point to another economic indicator - inflation - at a near four-decade high.

Consumer prices were up 7% year-on-year in December, the highest since 1982.

The inflation surge is likely to spur the Fed into action, with Mr Powell warning that the outlook for prices had even become "just a bit worse" recently.

Markets are now betting that the US central bank will hike rates four times this year.

The International Monetary Fund predicts that economic growth will slow to 4% for 2022.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
China Accuses US of Violating Trade Truce
Panama Port Owner Balances US-China Pressures
France Implements Nationwide Outdoor Smoking Ban to Protect Children
German Chancellor Merz Keeps Putin Guessing on Missile Strategy
Mandelson Criticizes UK's 'Fetish' for Abandoning EU Regulations
British Fishing Boat Owner Fined €30,000 by French Authorities
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
×