US Economy Sees 3.4% Growth in Fourth Quarter Driven by Consumer Spending and High Exports

The US economy experienced growth at an annualized rate of 3.4 per cent in the fourth quarter of 2023, exceeding the 3.2 per cent estimates made a month earlier. This increase was mainly due to higher consumer spending and investment, according to the latest report from the US Commerce Department.

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 and is now projected to be growing at a slower but still respectable rate of 2.1 per cent in the current January-March quarter, as per a forecasting model released by the Federal Reserve Bank of Atlanta.

The upward revisions in consumer spending and non-residential fixed investment were the main factors contributing to this growth. However, these positive factors were partly offset by a downward revision in private inventory investment. Despite these challenges, however, optimism remains that it is heading towards a “soft landing” where inflation decreases without causing a harmful recession.

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By Riley Johnson

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