The US economy experienced a solid growth rate of 3.4% annually from October through December, as reported by the government on Thursday. This was an upgrade from the previous estimate of 3.2% growth in the last quarter of the year, according to the Commerce Department. Despite facing higher interest rates, the economy’s growth was driven by increasing consumer spending, exports, and business investments in various sectors.
The revised measure of gross domestic product (GDP) confirmed a slight deceleration from the previous quarter’s rapid 4.9% expansion rate. However, for the entire year of 2023, the US economy recorded a growth rate of 2.5%, which was an improvement from the 1.9% growth in 2022. This marks the sixth consecutive quarter where the economy has grown at an annual rate above 2%.
The Federal Reserve Bank of Atlanta’s forecasting model predicts that in the current January-March quarter, the economy will grow at a slower but still respectable annual rate of 2.1%. Despite multiple interest rate hikes by the Federal Reserve to combat inflation, job growth has remained consistent, and inflation rates have gradually declined over time.
This combination of steady economic growth and diminishing inflation has raised hopes that the Federal Reserve may achieve a “soft landing” by curbing inflation without causing a recession. The Commerce Department’s final estimate of fourth-quarter GDP growth was released on Thursday, with their first estimate of January-March growth set to be released on April 25th.
Overall, despite challenges such as higher interest rates and inflation concerns, it appears that
