The daily business briefing: January 28, 2022

The U.S. economy grew by 5.7 percent in 2021, its strongest growth since 1984, the Commerce Department reported Thursday. In 2020, it shrank by 3.4 percent, the largest drop in 74 years. The turnaround came after the federal government provided trillions of dollars in COVID-19 relief. Growth picked up in the fourth quarter as companies managed to restore inventories that had been depleted by supply-chain disruptions caused by the pandemic and strong demand. The recovery and supply problems have resulted in high inflation as well as strong job growth, which have made it possible for the Federal Reserve to map out plans to wind down its efforts to boost the economy with asset purchases and near-zero interest rates.

Apple on Thursday reported record quarterly revenue and profit despite supply chain problems. The iPhone maker said revenue reached $123.9 billion in the last three months of 2021, and profit hit $34.6 billion. Both figures exceeded analysts' expectations and smashed company records. CEO Tim Cook said supply chain constraints are expected to ease in the current quarter, although it was not possible to project when the bottlenecks would clear up for good. Apple predicted it would see year-on-year growth in the first quarter of 2022. Apple shares rose 4 percent in after-market trading after the earnings report.

A federal judge on Thursday invalidated a massive offshore oil and gas lease in the Gulf of Mexico, ruling that the Biden administration violated federal rules by relying on an analysis that didn't fully take into account how the leases would affect the climate. In his first days in office, President Biden issued an executive order pausing new oil and gas drilling permits. Thirteen states filed a lawsuit, and a Louisiana judge blocked the order. The Biden administration, saying its hands were tied, offered 80 million acres for drilling leases in the Gulf of Mexico, and sold 1.7 million acres of leases, netting nearly $192 million. Environmental groups sued over the sale, saying it was based on flawed assumptions from an outdated model, and U.S. District Court Judge Rudolph Contreras agreed.

Stock futures fell early Friday, giving back overnight gains as volatility continued on Wall Street. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down by about 0.4 percent at 6:45 a.m. ET. Futures tied to the tech-heavy Nasdaq were flat. The indexes' struggles came despite a 4 percent surge by Apple shares in after-market trading after the iPhone maker reported record quarterly revenue and profits despite supply-chain disruption. The major U.S. averages fell on Thursday and have had broad swings all week as investors reacted to the Federal Reserve's plans to tighten economic policy, with a likely interest rate hike in March. Earlier this week, the market's Cboe Volatility Index jumped to its highest level since October 2020.

Lowe's plans to open mini-Petco shops inside 15 of its stores in Texas, North Carolina, and South Carolina starting in February. The Petco stores-within-a-store will offer staples like dog and cat food, leashes, and litter, and some will also have on-site groomers and veterinarians, CNBC reports. If the pilot program is a success, expect more to quickly open across the United States. Both companies got a boost early in the coronavirus pandemic as people spent more time at home, with many tackling home-improvement projects or adopting pets. But rising inflation is making customers warier about spending, and the two companies are hoping they can get a boost by offering one-stop shopping for pet-loving homeowners.