Gross domestic product increased at a 4.0% pace, slightly below the 4.3% expectation from Dow Jones.
After a year in which a pandemic and politics posed challenges unlike the U.S. has seen in generations, the economy closed in fairly good shape. Gross domestic product, or the sum of all goods and services produced, increased at a 4.0% pace in the fourth quarter, slightly below the 4.3% expectation from economists surveyed by Dow Jones. This was the Commerce Department’s initial estimate of growth for the quarter. The annualized pace closed out a 2020 that saw GDP overall decline 3.5% for the full year and by 2.5% from the fourth quarter of 2019. The economy fell into recession in February, a month before the World Health Organization declared Covid-19 a pandemic. The 3.5% decline is the worst year for the U.S. since at least the end of World War II. The economy contacted at a post-Depression record 31.4% in the second quarter then rebounded to a 33.4% gain in the following three months. Increases in exports, nonresidential fixed investment, consumer spending, residential investment and inventories contributed positively to GDP for the fourth quarter, while across-the-board declines in government spending at the federal, state and local levels weighed on growth.
