- Gaza cultural heritage brought to light in Geneva
- 'Bullet for democracy': Trump returns to site of rally shooting
- Italy targets climate activists in 'anti-Gandhi' demo clampdown
- South Korean cult-horror series 'Hellbound' returns at BIFF
- Nepalis fear more floods as climate change melts glaciers
- Honduras arrests environmentalist's alleged murderer
- Padres pitcher Musgrove needs elbow surgery
- Supreme Court lets stand rules to curb mercury, methane emissions
- Boston beat Denver in NBA exhibition season opener, but Jokic says omens are good
- Chagos diaspora angry at lack of input on islands' fate
- Biden says 'not confident' of peaceful US election
- US trade chief defends tariff hikes when paired with investment
- Lukaku stars as Napoli beat Como to hold Serie A top spot
- Ohtani set for MLB playoff debut as Dodgers face Padres
- Pogba's drug ban cut to 18 months from four years
- Devine leads New Zealand to big win over India in Women's T20 World Cup
- Bosnia floods kill 16 people
- EU court blocks French ban on vegetable 'steak' labelling
- Prosecutors seek dismissal of rape charges against French rugby players
- Meta AI turns pictures into videos with sound
- Bolivia's Morales says claims he raped a minor are a 'lie'
- MLB Reds hire two-time champion Francona as manager
- Daniel Maldini receives first Italy call-up for Nations League
- US dockworkers return to ports after three-day strike
- Ancelotti points finger at Madrid's 'lack of intensity'
- Haiti reeling after 70 killed in gang attack
- Five Czech kids in hospital over TikTok 'piercing challenge'
- What happens next in Iran-Israel conflict?
- Country star Garth Brooks denies rape accusations
- Stubbs hits maiden century as South Africa make 343-4 against Ireland
- DR Congo to begin mpox vaccination campaign Saturday in east
- Odegaard injury has forced Arsenal to be 'different', says Arteta
- Ratcliffe refuses to guarantee Ten Hag's Man Utd future
- Meta must limit data use for targeted ads: EU court
- Mauritius to hold legislative election on November 10
- Britain qualify for America's Cup final after 60-year wait
- IMF asks Sri Lanka to protect hard-won gains
- Morata returns to Spain Nations League squad after injury
- Irish regulator to probe Ryanair use of facial recognition
- Public allowed to see video evidence in France mass rape trial
- US hiring soars past expectations in sign of resilient market
- Under-fire Ten Hag 'together' with Man Utd hierarchy
- Guardiola talks of Man City love affair as financial hearing rumbles on
- De Bruyne out of Belgium Nations League squad
- Japanese trainer Yahagi hopes Shin Emperor achieves 50-year-old Arc dream
- UK's Starmer hails 'landmark' carbon capture funding
- As EU targets Chinese cars, European rivals sputter
- Bosnia floods kill 14 people
- Tennis world number one Swiatek splits with coach Wiktorowski
- Liverpool share responsibility for Nunez goal drought, says Slot
US economy grew 5.7% in 2021, but Omicron hit looms
The world's largest economy staged a solid recovery last year as it grew at the fastest pace since 1984, but damage from the Omicron variant of Covid-19 still looms.
Surging prices continue to pose a challenge, as inflation picked up speed in the final three months of the pandemic's second year, according to official data released Thursday.
That threatens to dampen the consumer demand that has underpinned the recovery, while supply chain snarls continue to create headaches for businesses, and for President Joe Biden's efforts to return the country to normal.
After the downturn in 2020, US GDP expanded by 5.7 percent last year, the Commerce Department said in its latest quarterly report.
Amid the rise of Omicron in the October-November period, GDP grew 6.9 percent, the data showed. While that topped expectations, economists warn the figure was inflated by businesses' attempts to rebuild depleted inventories.
"The upside surprise came largely from a surge in inventories and the details aren't as strong as the headline would suggest," said Kathy Bostjancic of Oxford Economics.
"What's more, beneath the headline GDP print, the handoff to 2022 is weak. With consumer spending retrenching in December and Omicron dampening economic activity," she said in an analysis.
Ian Shepherdson of Pantheon Macroeconomics agreed, saying the start of the year looks grim: "Our tentative Q1 GDP forecast right now is zero."
But Biden, whose signature social spending bill is stalled in Congress, cheered the report, highlighting "the fastest economic growth in nearly four decades, along with the greatest year of job growth in American history."
And, he said, "for the first time in 20 years, our economy grew faster than China's."
"This is no accident. My economic strategy is creating good jobs for Americans, rebuilding our manufacturing, and strengthening our supply chains here at home to help make our companies more competitive."
- Inflation on the rise -
Ongoing supply snarls and shortages, combined with strong demand for goods fueled by generous government aid, have created a perfect storm of inflationary pressures that have undercut Biden's approval among American voters.
Prices accelerated during the year, peaking in the October-December period with a 6.5 percent surge in the personal consumption expenditures (PCE) price index -- the measure the Federal Reserve focuses on. That was the biggest increase in 40 years.
For the full year, inflation rose 3.9 percent, according to the data, still far above the Fed's two percent goal.
Excluding volatile food and energy prices which have increased sharply in the year, the core PCE price index rose 3.3 percent in 2021, and 4.9 percent in the fourth quarter.
The Federal Reserve on Wednesday issued a clear signal that it plans to begin raising interest rates in March to tamp down inflation, but that also could restrain growth next year.
V.F.Barreira--PC