This morning the US Commerce Department released its second round of US Gross Domestic Product numbers for the fourth quarter of 2020, showing that the US economy grew by 4%. This is a sharp slowdown in the 33% expansion in the US economy that came as a third quarter rebound from the first half annual collapse thanks to the Covid shutdowns, lost jobs, and simple social distancing to avoid the virus undertaken by millions. Overall the US economy shrank by 3.5% in 2020.
The first half plunge in GDP in the United States was historic and the course of the year was a wild one of contraction and expansion, but as we go into 2021 things are slowing. Pockets of strength in the economy were in real estate, fixed investment, and stock market gains, all driven in part due to a Federal Reserve policy of zero interest rates and bond buying operations. While the economy grew in the second half of the year of 2020, the average American suffered as their personal income decreased $339.7 billion in the fourth quarter and $541.5 billion in the third quarter. Without the massive government stimulus the entire economy would collapse.