GDP grew by 3.3% in the fourth quarter of 2023

GDP grew by 3.3% in the fourth quarter of 2023

People shopping at the Glendale Galleria in California.
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  • Real GDP grew by 3.3% year-on-year in the fourth quarter.
  • This is 2.0% more than forecast.
  • After real GDP rose 4.9% in the third quarter, the latest point still shows strong growth.

The U.S. economy still grew at a strong pace in the final quarter of 2023, but slowed from the start of the year, according to new real gross domestic product data released Thursday morning.

According to the Bureau of Economic Analysis, real GDP increased by 3.3% annually. This preliminary estimate is lower than the third estimate of 4.9% annualized for the third quarter. The last number was also above forecast 2.0%.

“Compared to the third quarter of 2023, the decline in real GDP in the fourth quarter primarily reflected slowdowns in private inventory investment, federal government spending, residential fixed investment, and consumer spending,” said Thursday’s press release.

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The last quarter saw growth in many areas, including exports and government spending.

“Real GDP growth reflected growth in consumer spending, exports, state and local government spending, nonresidential fixed investment, federal government spending, private inventory investment, and residential fixed investment,” the report said.

Positive GDP figures for the past few quarters suggest that the US has thus far avoided a recession – although it’s important to note that GDP isn’t the only thing to consider when looking at a recession. There are various economic indicators, such as employment data, that economists consider when estimating the business cycle.

The NABE (National Association of Business Economics) Business Conditions Survey shows that more respondents feel more optimistic that the country will not experience a recession anytime soon. The survey was conducted from December 28, 2023 to January 9, 2024. SHOULD BE The survey found that 91% of “respondents are 50% or less likely to see the U.S. enter a recession in the next 12 months, up from 79% in the October survey.”

Steve Rattner, chairman and CEO of Willett Advisors, said this Bloomberg interview “I’m not predicting a recession,” but given that we’re close to the edge, it could go either way.

“There are signs that the economy is starting to weaken a little bit,” Rattner said. “The job market is weakening a little bit. Retail sales are weakening a little bit in line with inflation. You’re seeing signs of strain and strain, savings rates, credit card usage, premium car payments, things like that.”

“There’s no question,” Rattner said, that the economy was stronger last year than expected because there was more purchasing power.

Nonfarm payrolls growth suggests a strong job market last year, despite smaller job growth.

“Wage employment increased by 2.7 million in 2023 (average monthly earnings of 225,000), down from an increase of 4.8 million in 2022 (average monthly earnings of 399,000),” the Bureau of Labor Statistics said in a news release.

Overall, real GDP grew more strongly last year than in 2022 — 2.5% in 2023, compared to 1.9% in 2022. Rising consumer spending was just one area behind real GDP growth last year.

“In 2023, real GDP growth primarily reflected increases in consumer spending, nonresidential fixed investment, state and local government spending, exports, and federal government spending, offset by declines in residential fixed investment and inventory investment was partially compensated with”. .

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