The U.S. economy grew at a solid pace 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. Despite facing higher interest rates, the economy’s growth was driven by increasing consumer spending, exports, and business investments in various sectors, which marks the sixth consecutive quarter where the economy has grown at an annual rate above 2%.
For the entire year of 2023, the U.S. economy recorded a growth rate of 2.5%, which was an improvement from the 1.9% growth in 2022. The revised measure of gross domestic product by the Commerce Department confirmed a slight deceleration from the previous quarter’s rapid 4.9% expansion rate, but still maintained steady economic growth despite inflationary pressures and multiple interest rate hikes by the Federal Reserve to combat it.
Inflation remains a concern for policymakers and economists alike, with consistent job growth and a gradual decline in inflation rates providing hope that a “soft landing” may be achievable by curbing inflation without causing a recession. However, multiple interest rate hikes by the Federal Reserve to combat inflation have resulted in slower economic growth in certain sectors and increased borrowing costs for businesses and households alike.
The current January-March quarter is expected to grow at a slower but still respectable annual rate of 2.1%, according to the Federal Reserve Bank of Atlanta’s forecasting model.
The report released on Thursday was the Commerce Department’s final estimate of fourth-quarter GDP growth, with
