promoearn: The Daily Money: 2021 had strongest economic growth since 1984

Thursday, January 27, 2022

The Daily Money: 2021 had strongest economic growth since 1984

ALL THE MONEY NEWS YOU NEED TO KNOW

Thursday, January 27

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Good morning and happy Thursday, Daily Money readers. Jayme Deerwester with you here, keeping toasty in the blue equivalent of Adam Sandler's "Red-Hooded Sweatshirt" as the temps dip-dip-dip into the low double-digits. (I love you, sweaaaaatshirt!)

🗞 Today's top story 🗞

It may not have felt like it but the U.S.economy grew 5.7% last year, making 2021 the strongest year of growth since 1984 . It bounced back sharply in the fourth quarter as consumers splurged again after a summer spike in COVID-19 cases eased and businesses replenished depleted inventories. Altogether, the economy grew 5.7% in 2021 and generated a record 6.4 million jobs. By comparison, in 2020, the economy shrank 3.4% and lost 9.4 million jobs as the pandemic shuttered businesses and kept Americans from their normal activities.

It's not all good news, however. By the end of the fourth quarter, the milder but more contagious omicron variant was prompting shoppers to hunker down again. Retail sales fell 1.9% in December. The pullback is likely to hinder economic growth more substantially the first three months of 2022, says Ian Shepherdson, chief economist of Pantheon Macroeconomics.

💡 Daily insight 💡

If you think gasoline prices are already too high this year, brace yourself for an even bigger shock. That's because more drivers are expected to hit the road as the omicron variant fades and the spring driving season arrives. Prices are expected to rise even more if war breaks out in Ukraine or if U.S.-led countries slap heavy sanctions on Russia.

"There's a lot lurking in the oven and not a lot for the advantage of the consumer," says Patrick De Haan, head of petroleum analysis for GasBuddy.

De Haan and another respected price watcher, Tom Kloza, global head of energy analysis for the Oil Price Information Service, both independently predict $4 a gallon gas prices nationally by Memorial Day, traditionally the kickoff weekend to summer. And that's if Russia doesn't unleash an attack on Ukraine before then.

In that case, "all bets are off," Kloza adds.

💵 Smells like tax season 💵

Here's today's tip: If you're eligible to contribute and to deduct your contributions into a traditional or Roth IRA, the IRS may still let you lower your 2021 tax bill before you file your taxes by April 15. Once you miss the deadline to make traditional or Roth IRA contributions for a tax year, that opportunity is gone forever. That means you miss out on the subsidies the government wants to provide to help build your nest egg.

🎶 Mood music 🎶

If you're old enough to remember the Bosnian war of the 1990s, the current tensions on the Russia-Ukraine border may giving you some particularly unpleasant feelings of déjà vu. It's got me thinking about one of my favorite Keane tracks, "The Night Sky." The songs's narrator, a child, longs to do all the normal things he used to take for granted but can't anymore due to armed conflict in his city: "One day I will be back in our old street, safe from the noise that's falling around me. And we'll release this town from the people who are trying to knock it down. And then only city lights will brighten the night sky and there will be no sound."