U.S. economy sees largest yearly growth since 1984

The U.S. Commerce Department reported on Thursday that the country's gross domestic product (GDP) increased at a 6.9% annualized pace in the last quarter of 2021, exceeding expectations.

The GDP, the sum of all goods and services produced in the United States. grew in the October-through-December period, despite supply chain issues and the emergence in December of COVID-19's high-contagious Omicron variant, which likely slowed growth late the fourth-quarter of 2021.

Economists surveyed by Dow Jones expected a 5.5% gain, according to CNBC.

The increase also exceeded the unrevised 2.3% growth in the third quarter, the news outlet also reports. 

According to economists, gains appear to have come from increases in private inventory investment, strong consumer activity as reflected in personal consumption expenditures, exports and business spending as measured by nonresidential fixed investment.

Although 2021 was plagued with coronavirus related uncertainty, the quarter ultimately brought an end to a year that saw a 5.7% increase in annualized GDP -- the strongest pace since 1984.

Markets reacted positively to the news, with stock futures posting gains while government bond yields were mixed.

“The strength of the economy last year stood in stark contrast to the collapse in activity in early 2020, but also speaks to the success of both the public and private sector in quickly adapting to the unprecedented challenges created by the pandemic,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “That being said, potential headwinds still exist, as the global risks associated with the COVID-19 pandemic persist.”