Performance continues to defy recession expectations
The US economy expanded at an annualized clip of 3.3% in 2023’s fourth quarter, a stronger performance than anticipated as consumer resilience continued to stave off the threat of recession.
New figures from the Bureau of Economic Analysis showed gross domestic product (GDP) growth came in higher than many experts had predicted in the final three months of the year, with a Bloomberg survey of economists indicating expectations of 2% growth for the quarter.
The news strengthened confidence that the economy could be on course for the Federal Reserve’s hoped-for “soft landing” – the return of inflation to the central bank’s 2% target while avoiding sharp economic pain.
The brisker-than-envisaged clip of GDP growth seen in Q4 meant the economy expanded at a higher annualized rate in 2023 than the prior year, at 2.5% compared with 1.9% in 2022. GDP for the third quarter, meanwhile, was revised down to 4.9%.
Personal spending, one of the most important indicators of economic growth, rose by 2.8% in Q4 as housing and business investment also posted noteworthy gains.
All eyes are now on the Federal Reserve, which is set to meet next week (January 30-31) prior to revealing its first decision on interest rates of 2024. After a series of hikes throughout 2022 and 2023, the Fed has hit pause in recent times – and is expected to do so again amid positive signs on the inflation front.
The US inflation rate increased in December, rising 3.4% as housing costs surged, including spikes in shelter, electricity, and motor-vehicle insurance.
— Mortgage Professional America Magazine (@MPAMagazineUS) January 11, 2024
Read more: https://t.co/tw2ZFz1mDA#breakingnews #mortgageindustry #marketupdates #inflation
Overall inflation ticked up unexpectedly by 3.4% in December, but has posted a big decline since spiking to a four-decade high of 9.1% in the middle of 2022.
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