The US economy experienced growth at a 3.4 per cent annualized rate in the fourth quarter of 2023, surpassing the 3.2 per cent estimates made a month earlier. This increase was primarily due to higher estimates of consumer spending and investment, which contributed to the growth.
Throughout the year 2023, the US economy, which is the world’s largest, grew at a rate of 2.5 per cent, reflecting an improvement from the 1.9 per cent growth seen in 2022. Despite initial concerns of a recession, the US economy has defied expectations, prompting optimism that it is heading towards a “soft landing” where inflation decreases without causing a harmful recession.
The latest report from the US Commerce Department states that positive factors such as upward revisions in consumer spending and non-residential fixed investment were main contributors to the growth in Q4 of 2023. However, these were partly offset by downward revisions in private inventory investment.
As per a forecasting model released by the Federal Reserve Bank of Atlanta, now in the current January-March quarter,
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