The numbers: The US economy grew at a revised annual rate of 4.3% in the fourth quarter – slightly higher than previously reported – and even faster growth is expected in the coming months.
Gross domestic product has increased 4.1% from the previous reading, mainly due to slightly higher business investment, revised government figures show.
The economy appears to be accelerating again after a slowdown towards the end of the year following a record outbreak of the coronavirus. Economists surveyed by Dow Jones and The Wall Street Journal predict that GDP will increase by 4.9% in the spring and 7% in the summer.
GDP is the sum of all goods and services produced by the economy and is sort of a scorecard for how the US is performing.
The Bureau of Economic Analysis updates the GDP report twice after the initial publication, as more timely information is obtained to provide a more complete picture of how the economy has performed.
Read: The US economy is accelerating in March – and it’s not about to slow down
What happened: The biggest change in the fourth quarter GDP report was business investment. Investments in supplies, intellectual property and housing were all slightly higher than previously reported.
Exports also increased by a revised 22.3% from the previous 21.8%. And government and local spending was not as weak as previously reported.
The increase in consumer spending – by far the largest contributor to the GDP report – was cut by a tick from 2.4% to 2.3%.
Most of the other figures to win the report have changed little.
The big picture: The economy is picking up again due to a decrease in the number of coronavirus cases, rising vaccinations and warmer weather. A massive $ 1.9 trillion federal stimulus will give the economy an extra boost.
The biggest unknown is whether the coronavirus will continue to fade.
Another potential thorn is rising inflation. The recovery has led to a spate of price hikes in many key inventories, a problem exacerbated by a growing shortage of key materials, ranging from wood and computer chips.
Read: Economists say inflation risk is highest in two decades and could force Fed to raise interest rates by 2022
Market reaction: The Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
would open lower in Thursday’s trades.