US economy grew 5.7% in 2021, 6.9% in Q4 amid Omicron: Govt

After contracting in 2020, US economic growth saw its biggest increase since 1984 with a rebound to 5.7 percent in 2021, the second year of the Covid-19 pandemic, the government reported Thursday.

But the hit from the Omicron variant of the virus held down the recovery in the final quarter of the year, when GDP grew 6.9 percent, the Commerce Department reported.

Prices accelerated during the year as well, peaking in the October-December period with a 6.5 percent surge in the personal consumption expenditures (PCE) price index — the measure which 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.

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.