The Bureau of Economic Analysis reports the economy grew 6.9% in the last quarter of 2021. This is close to our forecast of 6.7%. Many forecasters had similar estimates.

For the year, the economy grew 5.7% in 2021. It contracted -3.4% in 2020 because of the massive recession caused by the lockdown mid-year.

Why it matters: Omicron, it seems, hit too late in the 4^th quarter of 2021 (the last few weeks of December) to slow growth. The economy grew only 2.3% in the 3^rd quarter, so the acceleration is welcomed news. Most of the quarter was post-Delta and pre-Omicron, which shows that when the economy is less encumbered by the virus, it grows rapidly.

Yes, but: A good deal of growth in the 4^th quarter came from inventory build up, 4.9% in fact. This may put downward pressure on growth going into 2022 as businesses sell their inventories rather than producing more of their products.

This could be a harbinger of a slower-growing economy throughout 2022. Right now, we are forecasting growth of 3.5% this quarter and around that level the rest of the year. If more people come back into the workforce and supply chain problems improve, we could surpass those marks.

Be smart: On our current trajectory, the economy should return to its pre-pandemic size in mid-2022, which is remarkably fast. It will take years of above-previous-trend growth to make up for the lost economic activity during COVID, but this is a good sign our economy remains incredibly resilient.

—Curtis Dubay, Senior Economist, U.S. Chamber of Commerce