Gross domestic product (GDP) growth in the United States was lower than previous estimates in the fourth quarter 2021 and revised down to 6.9%, according to third and final estimate of the Bureau of Economic Analysis (BEA).
The revision was a decrease from the second estimate of 7% but an increase from the 2.3% increase in GDP in the third quarter, the BEA said. He added that the updated estimate was “based on more complete source data” than previously available.
Fourth-quarter GDP was primarily driven by increases in private inventory investment exports, personal consumption expenditure (PCE) and exports, which were partially offset by declines in federal, state and local government spending .
Although the BEA’s revised estimate of economic activity is lower than its previous estimate, the economic growth rate of 6.9% is still solid for the current economy. Consumers who want to take advantage of interest rates before the next Fed rate hike can consider refinancing their private student loans. Visit Credible to find your personalized interest rate without affecting your credit score.
MOST AMERICANS SEEING EFFECTS OF INFLATION, SURVEY CLAIMS, MANY EXPECTING NO RELIEF
Car dealership investment boosts GDP, says BEA
Private investment in inventory helped boost real GDP growth in the fourth quarter of 2021, driven by business investment by motor vehicle dealers, according to the BEA.
Demand for new cars continues to rise as some drivers are wait six to nine months just to get their new vehicles and dealerships are dealing with record inventory levels. In fact, total new vehicle sales are expected to reach nearly 1.25 million cars in December 2021, down 20.5% from a year earlier. according to a statement from JD Power.
“Retailers continue to sell most vehicles almost as soon as they arrive in stock,” Thomas King, president of data and analytics at JD Power, said at press time. “In December, a record close to 57% of vehicles will be sold within 10 days of arriving at a dealership, while the average number of days a new vehicle waits at a dealership before being sold is on the rise. to fall to 17 days, a record low and down from 49 days a year ago.”
Car prices are hitting new highs as the average price of a new vehicle topped $45,000, according to JD Power. This comes as the cost of living is rising due to high inflation and national income has been unable to keep pace with rising market prices. Additionally, a recent report from Edmunds found that a record 82.2% of people buying a new car paid more than the list price in January, up from just 2.8% a year ago.
Drivers looking to save money in this competitive auto sales environment could potentially lower their car insurance rates by comparing providers. Use Credible’s free tools to shop around and lower your car insurance premium today.
FEDERAL RESERVE RAISES INTEREST RATES: WHAT TO DO NOW
Consumers can expect GDP to start falling: expert
The GDP growth rate jumped from the third to the fourth quarter in 2021, but it could take a turn and start to decline in the coming year due to the Federal Reserve’s announcement of a rate hike. of interest this year.
The central bank rising interest rates in March for the first time since 2018, and added that further rate hikes will likely be needed throughout 2022 and into 2023. At the time of the announcement in March, an expert said that future rate hikes will likely slow economic growth in the coming year.
“The Federal Reserve has signaled several hikes in the federal funds rate throughout the year, forecasting that it will reach 1.9% by the end of 2022 – revising its December projection by a full percentage point “said Dawit Kebede, head of the Credit Union National Association (CUNA). economist. “This will increase consumers’ cost of borrowing and slow spending. Consumer spending contributes two-thirds of gross domestic product – the value of all goods and services in the economy. GDP growth projections will also decline with the increase in the federal funds rate.”
If you’re looking to take advantage of interest rates before they rise further in 2022, you could Consider refinancing your mortgage to lower your monthly payments. Contact Credible to speak with a home loan expert and get all your questions answered.
Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at firstname.lastname@example.org and your question might be answered by Credible in our Money Expert column.