U.S. gross domestic product grew at a 7% annualized rate in the fourth quarter of 2021, a revised estimate from the Bureau of Economic Analysis showed Thursday morning.
The slight upward revision was about what was expected and indicates that economic growth remained strong throughout the early winter despite a major outbreak of COVID-19.
The higher GDP reading is good for President Joe Biden, whose party is facing a tough midterm election challenge from Republicans later this year. Republicans have been using negative facets of the economy and Biden’s sinking approval ratings as talking points in the lead-up to the November elections.
December was marked by the new omicron strain, which peaked in mid-January at a daily average of more than 800,000 new cases. Since then, the country has seen a precipitous decline in new cases and is nearly back to where it was prior to the variant’s emergence. Cases are down 66% over the past two weeks, hospitalizations are down 44%, and deaths 24%.
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The strain was expected to peel back job growth, given the enormous number of people it affected, although the economy crushed expectations (some of which forecast a net loss) in January and added 467,000 jobs.
Thursday’s report will reassure the Federal Reserve and its chairman, Jerome Powell, that they must move quickly to pull back emergency measures and rein in inflation. Consumer prices grew 7% in the year ending in December, the fastest pace in decades.
Many officials and economists fear that the Fed has been behind the curve in driving down inflation and risks causing disruption through rate hikes.
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While the U.S. has managed to claw back many jobs since the pandemic, it is still millions of jobs short of where it was pre-pandemic when it had an ultra-low 3.5% unemployment rate.
