Despite previously estimating a 3.2% growth pace, the U.S. government said Thursday that the economy actually grew at a 3.4% annual pace from October to December 2023. This measure of the total output of goods and services was a decline from the 4.9% rate of expansion between July and September 2023, but marked the sixth consecutive quarter of the economy growing at an annual rate of more than 2%.
However, in light of higher interest rates, last quarter’s growth is seen as solid. It was bolstered by increasing consumer spending, exports and business investment in buildings and software. Annually, the economy grew 2.5% in 2023, a boost from 1.9% in 2022.
A forecasting model from the Federal Reserve Bank of Atlanta predicts that the economy will grow at a 2.1% annual rate in the current January to March quarter—slower than before, but still decent. Additionally, the GDP report indicated that inflation pressures are starting to relax. The personal consumption expenditures index increased at a 1.8% annual rate in the fourth quarter of 2023, down from 2.6% in the third quarter.
