Today’s news of a slightly slower US economic growth rate than previously estimated comes as a surprise to many. US real gross domestic product (GDP) increased at an annual rate of 2.6% in the fourth quarter of 2022, according to the third estimate released by the US Bureau of Economic Analysis – 0.1% lower than the previous estimate of 2.7%. The decrease was mainly attributed to downward revisions of exports and consumer spending.
Despite this, private inventory investment, non-residential fixed investment, federal government spending, and state and local government spending all showed signs of increase, which was partly offset by decreases in residential fixed investment and exports. Moreover, imports decreased in the fourth quarter.
Previous Wall Street forecasts had predicted a similar growth rate in the first three months of 2023, but MarketWatch reported that hiring and consumer spending have been unexpectedly stronger, suggesting a possible recession may be further away. In addition, GDP growth in the third quarter of 2022 was 3.2%.
All in all, the report released today indicates that the US economy is continuing to grow at a steady pace, despite the slightly slower rate than predicted.