Good Growth

The US economy picked up steam in 21Q4, growing at a strong 6.9% annualized rate, up from a 2.3% annualized rate in 21Q3, GDP’s best quarterly showing since 2000Q2. While consumer spending grew 3.3% in the quarter, inventory growth was the key GDP driver, contributing 4.9 percentage points to growth. Unlike in the past, inventory investment should continue well into CY22, and in the process hopefully reduce inflationary pressures.