GDP for the October-December quarter increased from an estimate last month of 4.1%. The upward revision reflects a stronger rebuilding of inventories by companies.
For the year as a whole, GDP declined 3.5%, the largest annual decline since falling 11.6% in 1946 when the United States demobilized after World War II. The drop of 3.5% is unchanged from the previous report.
Economists expect a huge rebound this year, helped by government support programs, including a $ 1.9 trillion program signed by President Joe Biden on March 11 that pays $ 1,400 to individuals, extends emergency unemployment until early September and provides billions of dollars in aid to state and local governments.
Economists believe that all of the government’s relief measures will increase GDP in the current quarter from January to March to 5% or more. They forecast year-round growth of around 6%, which would be the strongest performance since 1984, when the economy was emerging from a deep recession under the Reagan administration.
“The economy is poised for robust growth,” said Mark Zandi, chief economist at Moody’s Analytics. He highlighted what he called a “medley of aid including substantial stimulus checks, more unemployment insurance, rentals, childcare and food aid and help for small businesses. , airlines, schools and state and local governments. ”