The US economy grew 5.7 percent last year, the biggest increase since 1984, according to a January 27 Commerce Department report. That said, however, the growth “wasn’t a straight line,” notes Mark Zandi, chief economist at Moody’s Analytics. “The economy remains tethered to the pandemic.” For example, though gross domestic product expanded at a whopping 6.9 percent annual rate in the final three months of 2021, it “recently lost momentum” explains The Wall Street Journal, “with business activity undermined by pandemic-induced shortages of supplies and workers.” Still, as a whole, “2021 marked the strongest economic rebound in decades.”
American Businesses initially boomed during the vaccine rollout last spring and early summer, as protected Americans began to once again travel and dine out. That surge slowed, however, once the Delta variant arrived, notes NPR, and Omicron reared its ugly head not too long after. “Q4 started with a bang and ended with a whimper,” Zandi told NPR. “October was a fantastic month for the economy — consumer spending, investment — everything was kind of firing on all cylinders. And then by December, Omicron came on the scene quickly and did a lot of damage.” Even with its strength, last year’s economic growth fell short of economists’ hopes, proving COVID has still held the recovery back, note NPR and the Journal. “There were just too many people who didn’t get vaccinated,” Zandi added. “It’s admirable how well the economy did perform, despite the fact that vaccines didn’t exactly solve the problem.”
Positively, however, though consumer spending slowed in the first half of January, it did not decline drastically, suggesting Americans “aren’t too spooked and should keep output growing.” To that end, even with Omicron’s drag, economists believe “activity should normalize as the variant fades and spring approaches,”
