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Source: FRED; Billions of chained 2012 dollars; Chart: Axios Visuals

One of the last major economic report cards of the Trump era lends perspective to the historic damage caused by the pandemic, which continued to weigh on growth in the final quarter of 2020.

By the numbers: The U.S. economy grew at a 4% annualized pace in the fourth quarter, a sharp slowdown in growth compared to the prior quarter. For the full year, the economy shrank by 3.5% — the first annual contraction since the financial crisis and the worst decline since 1946.

What happened: A resurgence in coronavirus cases and a delay in additional government aid contributed to the pullback in growth. In the third quarter, the U.S. economy grew at a 33.4% annualized pace.

  • In normal times, a 4% annualized growth rate would be strong. But in pandemic times, it shows the sharp bounce back expected once the economy reopened wasn't sustained.

What they're saying: The report "represents a major disappointment and hit to the nascent recovery in the domestic economy," Joseph Brusuelas, an economist at RSM, wrote in a note.

Zoom in: Economic growth in the final quarter of the year was driven by strong consumer spending, capital expenditures (i.e. businesses investing in equipment, buildings, etc.) and the hot housing sector.

  • It was dragged down by a slump in state, local and federal government spending and a surge in imports (which are a curb on GDP).

The bottom line: The U.S. economy remains in a deep hole and a full economic recovery is a ways off. The economy is still over $473 billion smaller than it was before the pandemic hit.

Go deeper

Ben Geman, author of Generate
Jan 29, 2021 - Economy & Business

Chevron posts another quarterly loss under weight of pandemic

Photo: Justin Sullivan/Getty Images

Chevron posted another quarterly loss Friday in the latest sign of how the pandemic is still weighing on oil companies despite some price recovery during the second half of the year.

Driving the news: The oil giant reported a $665 million loss for the October-December period, but it shrinks to $11 million on an adjusted basis after considering charges on its acquisition of Noble Energy and "foreign currency effects."

Bill Gates faces scrutiny over relationship with Microsoft employee, Epstein ties

Photo: Alessandro Di Ciommo/NurPhoto via Getty Images

Representatives for Bill Gates pushed back on claims Sunday that he left Microsoft's board because of an earlier sexual relationship and against two other reports detailing more extensive ties with Jeffrey Epstein than had previously been reported.

Driving the news: Microsoft said in an emailed statement to Axios that it "received a concern" in 2019 that its co-founder "sought to initiate an intimate relationship with a company employee in the year 2000," but denied a Wall Street Journal report that its board members thought Gates should resign over the matter.

AT&T in talks with Discovery to combine media assets

Illustration: Annelise Capossela/Axios

AT&T is in talks with media giant Discovery about merging its media assets, like CNN, TBS and TNT, according to two sources familiar with the discussions.

Why it matters: A potential merger could allow AT&T and Discovery to better compete with entertainment giants like Disney and Netflix in the video streaming wars.