Rebalancing (Mostly) Got Back on Track in 2021Q4
While the Delta variant continued to hold back the recovery in selected hard-hit services, both the overall pace of growth and its composition of growth are encouraging.
Good news: Americans produced about 1.7% more goods and services in October-December 2021 than in July-September on a seasonally-adjusted basis.1 That’s the fastest quarterly growth rate since 2020Q3. At this rate, it shouldn’t take long before most of the economic damage of the pandemic is behind us.
Moreover, the composition of that growth suggests that the ongoing rebalancing of demand from goods and housing to consumer services and business investment is proceeding in the least disruptive way possible. But there is still plenty of room for improvement when it comes to certain hard-hit services categories—and the Delta variant likely prevented those sectors from recovering even faster.