Wells Fargo: US Economic Growth Was Strong At The End Of 2021

Data released on Wednesday, showed real GDP grew during the fourth quarter an annualized rate of 6.9%, below the 7% of previous estimates. According to analysts at Wells Fargo, the sequential rate of real GDP growth likely has downshifted in the first quarter of 2022, but it appears to have remained in positive territory.

Key Quotes:
“The first two estimates had shown that real GDP growth in the fourth quarter was driven largely by modest growth in consumer spending and by a sizable increase in inventories, which likely was intentional given the depleted nature of stocks in previous quarters. These drivers of growth in Q4 were generally reaffirmed by today’s release.

The sequential rate of real GDP growth likely has downshifted in the first quarter, but it appears to have remained in positive territory. The BEA is scheduled to publish the first estimate of Q1-2022 GDP growth on April 28.”

“Overall as demand softens we look for profit growth to slow this year. Our latest forecast has real GDP rising 3.0% for 2022 as a whole and corporate profits advancing roughly 8%.”