- Real GDP grew at an annual rate of 3.3% in the fourth quarter.
- This was higher than the expected 2.0%.
- Real GDP rose 4.9% in the third quarter, the latest point in time still showing strong growth.
The U.S. economy continued to grow at a solid pace in the final quarter of 2023, but has slowed since the start of the year, according to new real gross domestic product data released Thursday morning.
Real GDP grew at an annual rate of 3.3%, according to a news release from the Bureau of Economic Analysis. This advance forecast is lower than the third quarter forecast (annualized rate of 4.9%).The latest numbers were also higher. forecast 2.0%.
Thursday's news release said: “The slowdown in real GDP in the fourth quarter compared to the third quarter of 2023 primarily reflects a slowdown in private inventory investment, federal government spending, housing fixed investment, and consumer spending.” said.
Last quarter saw increases in many areas, including exports and government spending.
“The increase in real GDP reflects increases in consumer spending, exports, state and local government spending, nonresidential capital investment, federal government spending, private inventory investment, and residential capital investment,” the news release said.
While positive GDP numbers for the past few quarters indicate that the U.S. has avoided a recession so far, it's important to note that GDP is not the only thing to consider when considering a recession. is important. There are a variety of economic indicators, including data on employment, that economists consider when assessing business cycles.
According to the National Association for Business Economics (NABE) business survey, a high percentage of respondents feel optimistic that the country will not fall into recession anytime soon. The survey was conducted from December 28, 2023 to January 9, 2024. pot On that note, 91% of respondents believe there is a 50% or less chance that the U.S. will enter a recession in the next 12 months, up from 79% of respondents who held this belief in the October survey. “It's increasing,” he said.
Steve Ratner, chairman and CEO of Willett Advisors, said in a recent paper: Bloomberg interview “I'm not predicting a recession,” he said, but given we're so close to the brink, it could go either way.
“There are signs that the economy is starting to weaken a little bit,” Ratner said. “The job market is a little weaker. Retail sales are a little weaker on an inflation-adjusted basis. We're seeing signs of stress and tension, savings rates, credit card usage, subprime auto delinquencies. .”
Ratner said there was “no question” the economy was stronger than expected last year, in part due to increased purchasing power.
Growth in nonfarm payrolls also suggests that the job market was strong last year, despite lower employment growth.
“The number of salaried employees in 2023 increased by 2.7 million people (an average increase of 225,000 people per month), but this is less than the increase of 4.8 million people in 2022 (an average increase of 399,000 people per month),” according to the Bureau of Labor Statistics. It is stated in the news release.
Overall, real GDP grew more significantly last year than in 2022. In 2023, he increased by 2.5% compared to his 1.9% in 2022. Increased consumer spending is just one of the areas behind last year's real GDP increase.
“Real GDP growth in 2023 primarily reflected increases in personal consumption, non-residential capital investment, state and local government spending, exports, and federal government spending, partially offset by declines in housing fixed investment and inventory investment. ” said the news release. .
