GDP growth in the fourth quarter was revised up by 0.2 percentage points to a 3.4% seasonally adjusted annual rate, showing theThis was the third and final revision, meaning that these represent the final GDP figures. The data showed the economy expanded 2.5% for all of 2023, a rate that was not revised.
Thursday’s final report shows that the economy fared much better in 2023 than was expected. Notably, a year ago, Federal Reserve officials were projecting that GDP growth would only grow by 0.5% in 2023. “Net, net, the economy outperformed in the second half of last year despite the attempt of Fed officials to rein in growth to limit demand and inflation pressures,” said Chris Rupkey, chief economist at FWDBONDS. “The way forward for the economy is not as clear in 2024 with increasing uncertainty and rising geopolitical risks.
The Fed began raising interest rates in March 2022 as inflation rose. At its peak, price growth crested at about a 9% annual pace. Since that zenith, inflation has fallen to a 3.2% rate, according to the latest consumer price index numbers for January. That is still above the Fed’s preferred 2% level, although it shows the Fed’s two-year quest to tamp down inflation by raising interest rates has borne results. again in February and added another 275,000 jobs, the Bureau of Labor Statistics reported last week. The unemployment rate is at 3.9%, remaining at a low level by historical standards.