In the fourth quarter of 2023, the U.S. economy experienced higher growth than previously reported, with the Bureau of Economic Analysis revising Gross Domestic Product (GDP) up to an annual rate of 3.4%. This was primarily due to upward revisions in consumer spending and nonresidential fixed investments, despite a decrease in private inventory investments.
The increase in real GDP, adjusted for inflation, was recorded at 3.2%, which surpassed expectations for the fourth quarter of 2023. Factors driving this growth included consumer spending, government spending, exports, and fixed investments.
In addition to personal income and savings increases, U.S. corporate profits also rose by $5.9 billion in the fourth quarter of 2023, compared to a $9 billion increase seen in profits in the third quarter of 2023. The Bureau of Economic Analysis reported increases in real gross output, private goods and services-producing industries, and government output for the whole of 2023.
Seventeen out of twenty-two industry groups contributed to the rise in real gross output across various sectors in the fourth quarter of 2023. Price indices for gross domestic purchases and personal consumption expenditures also saw increases in the same period, at 1.9% and 1.8% respectively, with the PCE index excluding food and energy seeing a 2.0% increase.
