The data exposes the lies of Donald Trump, who in his speeches paints a country plunged into disaster. It turns out, however, that another indicator once again contradicts it. The United States economy grew more than expected in the last quarter of 2023. In this way, the United States borders on the possible recession that some saw as inevitable, thanks to a strong labor market and the spending capacity of households at the same time. moderate inflation.
Gross domestic producer (GDP), which measures goods and services produced, jumped as much as 3.3% at an annualized rate during the fourth quarter, according to data from the Commerce Department once adjusted for inflation. Wall Street analysts had envisioned a 2% gain in the last three months of the year when in reality it climbed to 2.8%. The third quarter grew at a rate of 4.9%.
Some experts asked themselves when they heard the news, where is the recession? The expansion above what was projected was due to an increase in consumer spending and the high level of hiring by companies despite the restrictive monetary policy of the Federal Reserve (Fed), whose pressure is increasing to begin cutting interest rates.
It is expected that next week’s Fed meeting will leave clues, although there are increasing bets that the first snip could come in March.
Thus concludes a year in which unemployment has been at historic lows, inflation has cooled and the recession has not been visible.
The 2023 numbers stand in stark contrast to what economists predicted a year ago, when they predicted a practically inevitable recession and anemic annual growth of 0.2% for the twelve months. The gain in the end was 0.7% higher than that registered in 2022.
“It has been a year of strong economic growth. It was believed that consumption would slow down but that has not happened,” said James Knightley, chief international economist at ING, in statements to The Wall Street Journal.
The expansion is expected to continue throughout 2024, although at a slower pace and there are bets that it will remain at 1%. The more than expected Fed rate cut should be an incentive for economic development, or this is what is expected. Signs of recession are not on the horizon even if GDP growth declines. Layoffs remain low, at historic levels.
Despite the mantra repeated by the most radical opponents of President Joe Biden and his “Bidenomics” (economic measures promoted by his government), Americans’ confidence in the economy is on the rise as wages exceed the price of consumption.
This confidence grew 29% from November to January, the largest increase in a two-month period since 1991, according to a study by the University of Michigan. Consumers expect inflation to still be much more moderate than they thought just a few months ago.
Analysts stressed that it is difficult to imagine how things could be better for what is called a soft landing after the rigorous measures to control the price of money decreed by the Fed, after eleven increases in interest rates, placing them at 5, 25-5.35%, the highest level in more than two decades.
There is GDP data for the last quarter that offers evidence of a solid and cemented recovery, experts noted. Consumer spending grew at 2.8% annually. The real estate sector, hit by the rise in interest rates, expanded modestly in the last quarter. Businesses increased investments in equipment. Personal profits grew more than prices with a strong labor market that continues to benefit workers.