U.S. GDP Rises by 2.9% in Fourth Quarter

Joshua Ramos
Source: Gallup News

Economists have had their eyes firmly on what today’s numbers will say about the movement of American consumer activity. Now, we have confirmation from the Gross Domestic Product (GDP) Report that the U.S. GDP has grown by 2.9% in the fourth quarter, exceeding projections.

Economists had previously predicted a rise of 2.8% in this report. The current number shows that the country’s economy is still growing, but at a slower pace than the third quarter’s 3.2%. Conversely, the fourth quarter numbers have shown solid consumer strength to end the year, despite reports noting that retail sales had dipped at the end of 2022.

GPD Shows Growth at a Slower Pace

The U.S. Gross Domestic Product is a figure that shows the estimated size of the nation’s economy. The number takes into account a variety of factors, such as the value of all goods and services produced in the country and the value of the production process. Moreover, the number has become a standard measuring tool for the calculation of economic health for more than seven decades.

Economists had anxiously awaited the results of the report that was released at 8:30 a.m. EST, which have shown economic growth for hte United States, but at a slower pace. Officially, the U.S. GDP showed a growth of 2.9% in the fourth quarter. Exceeding projections of 2.8%, but down from 3.2% in Q3.

Source: ThoughtCo

CNBC reports that economists who predicted this outcome are “divided on where the economy goes from here,” with an emphasis on the consumer.” The report notes that the stark drop in December retail sales of 1.1% shows a consumer pullback; potentially preceding a recessionary state.

Alternatively, other economists ensure that it is far too early to write off the consumer. Stating, “the economy could still avoid a contraction.” Amherst Pierpont Cheif economist, Stephen Stanley, states, “I know the conses view is a recession is imminent, but skeptical of that,” adding, “U think we stumble through 2023.”

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Source: Investopedia

Subsequently, NatWest Chief U.S. Economist, Kevin Cummins, has an alternative view. According to CNBC, he believes a recession is firmly on the way. Predicting a 1% decline in the upcoming first-quarter GDP report. Moreover, Cummins claims Federal Reserve interest rate hikes have had, “a lagged effect on the economy,” and already have the housing market in a recession.