According to ActionForex, analysts at TD Bank Financial Group note that the U.S. real GDP grew 4.0% (annualized) in the fourth quarter, in line with consensus expectations, and the rebound over the second half of the year from the worst of the pandemic shutdowns in the spring has left economic activity 2.5% below its year-ago level.

"Consumer spending grew 2.5% (annualized) in the fourth quarter. Growth was driven by a 4% gain in services spending, led by health care. Spending at food services and accommodation and transportation services both fell on the quarter. Spending on goods fell 0.4%, led by a 0.7% decline in nondurable goods, which was primarily food and beverages."

"Non-residential fixed investment posted a solid 13.8% gain. Spending on equipment once again led the way, rising 24.9% in Q4. Equipment is another area where spending is above its year-ago levels, up 3.4%."

"Residential investment surged 33.5% in Q4, reflecting investment in new single-family housing. Even more impressive than durable goods spending gains, residential investment is now up 13.7% versus a year ago."

"International trade continued to recover. Imports jumped 29.5% and exports rose 22%."

"The only major component of GDP to fall in the fourth quarter was government spending, which declined 1.2%. Spending at state and local levels fell (-1.7%) for the third straight quarter. Federal spending was down a more modest 0.5%."

"Overall for 2020, the economy contracted at an annual average rate of 3.5%, the worst performance since 1946. However, this masks a story of steep decline and almost-as-steep recovery. After shrinking by 10.1% in the first half (non-annualized) and rebounding by 8.5% in the second, real GDP ended the year 2.5% smaller than it was pre-crisis."

"The loss of momentum at the end of 2020 is going to hamper growth in the first quarter, which we expect to be more modest than the fourth. That said, it is likely to build through the quarter, as vaccinations ramp up and income supports turn into spending."