The US economy grew at the fastest rate in 2021 since the Reagan administration

Originally Published: 27 JAN 22 08:32 ET
Updated: 27 JAN 22 08:58 ET

    (CNN) -- The US economic recovery from the depths of the Covid pandemic continued strong last year.

US gross domestic product -- the broadest measure of economic activity -- expanded 5.7% last year, the fastest pace since 1984 when Ronald Reagan was in the White House, the Bureau of Economic Analysis reported Thursday.

The final three months of 2021 got a much better scorecard than economists had predicted: GDP grew at an annualized rate of 6.9% in the fourth quarter.

It was a substantial uptick from the Delta-ridden third quarter, GDP grew at an annualized pace of only 2.3%. In fact, it was the best quarterly performance since the third quarter of 2020 when the initial reopening boom buoyed economic growth.

High growth, high inflation

But it wasn't just the growth rate that jumped last year. Supply chain chaos, worker shortages and whopping demand also led prices to climb uncomfortably high.

For 2021, the personal consumption expenditure price index -- a key measure of inflation -- rose 3.9%, the largest increase since 1990.

In the fourth quarter, PCE inflation was 6.5%, the biggest jump since the third quarter of 1981.

This is a developing story. It will be updated

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