US economy grew at a shocking pace in the fourth quarter

Washington, DC CNN — The US economy remained shockingly robust in the fourth quarter to close out a remarkably strong 2023 as consumers and businesses continued to spend, crushing expectations of a recession. Gross domestic product, the broadest measure of economic output, rose at a seasonally and inflation-adjusted annualized rate of 3.3% from October through December, the Commerce Department reported Thursday. That was slower than the blistering 4.9% rate from July through September, when American consumers splashed out on services and goods. Growth in 2023 overall, from January through December of last year, registered at a robust 2.5% rate. But the fourth quarter’s rate trounced the 1.5% that economists were expecting, according to FactSet estimates. The economy’s strength in the final months of 2023 was broad based, driven by consumer spending, business investment, government outlays, exports and improvements in housing conditions. Related article Markets are trying to fight the Fed on rate cuts. It’s not working Consumer spending, which accounts for about two-thirds of the US economy, grew at a healthy 2.8% rate in the fourth quarter, a slightly softer pace than the 3.1% rate in the prior three-month period. Meanwhile, business spending accelerated to a 1.9% rate, up from 1.4%. “Prospects are good that the economy will continue to perform well this year,” Scott Hoyt, senior director at Moody’s Analytics, said in a release. “Consumers are doing their part and spending just enough to support broader economic growth.” Thursday’s GDP report shows that the US economy has cooled some in recent months, but it’s not clear if that was enough of a slowdown to keep the Federal Reserve on track to cut interest rates any time soon. Fed Governor Christopher Waller, an influential official at the central bank, said in a speech earlier this month that if “economic […]

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