The U.S. economy grew at an annual rate of 4.3 percent in the fourth quarter of 2020 in the third and final estimate, up from 4.1 percent in the previous estimate, the U.S. Commerce Department reported Thursday.
The upward revision primarily reflected an upward revision to private inventory investment that was partly offset by a downward revision to nonresidential fixed investment, the report showed.
"Whether measured by Gross Domestic Product or by Gross Domestic Income, the economy has not yet completely crawled out of the pandemic-induced hole into which it tumbled a year ago," Jay Bryson and Shannon Seery, economists at Wells Fargo Securities, wrote in an analysis Thursday.
"But, we expect the level of real GDP will surpass its pre-pandemic peak in the second quarter of this year," they said.
The U.S. economy contracted 3.5 percent in 2020 amid the COVID-19 pandemic, the largest annual decline of gross domestic product (GDP) since 1946, according to the department. It also marked the first negative annual growth in U.S. GDP since 2009.
In 2019, real GDP increased by 2.2 percent.
Amid COVID-19 shutdowns, the U.S. economy shrank at an annual rate of 5 percent in the first quarter of 2020, ending a decade-long economic expansion after the 2008 global financial crisis.
Then the economy went into free fall, dropping at a revised annual rate of 31.4 percent in the second quarter amid mounting COVID-19 fallout.
As businesses gradually reopened, the economy saw a robust rebound in the third quarter of 2020, expanding at a revised annual rate of 33.4 percent.
In the fourth quarter, U.S. economic recovery slowed amid a surge in COVID-19 cases and lengthy delay in fiscal support.
The increase in real GDP in the fourth quarter reflected increases in exports, nonresidential fixed investment, personal consumption expenditures, residential fixed investment, and private inventory investment, that were partly offset by decreases in state and local government spending as well as federal government spending, the official report showed. Imports, which are a subtraction in the calculation of GDP, increased. ■