US GDP growth dips slightly in Q4 2022, consumer spending revised down
The US Bureau of Economic Analysis (BEA) has released its third and final estimate of GDP growth for the fourth quarter of 2022, reporting a 2.6% increase, a slight dip from the previous estimate of 2.7%. The third quarter saw a growth rate of 3.2%.[0] Despite rising interest rates, the economy maintained its resilience, however, consumer spending, which drives most of the economy’s growth, was revised sharply down, falling to 1.0% from the previous estimate of 1.4%.[1] Spending on physical goods such as appliances and furniture, which had initially surged as the economy rebounded from the pandemic recession, fell for a fourth straight quarter.[2] The revision primarily reflected downward revisions to exports and consumer spending, while imports, which are a subtraction in the calculation of GDP, were revised down.[3] The pace of hiring is still healthy, and the unemployment rate is near a half-century low, but forecasters surveyed by the data firm FactSet have estimated that growth in the January-March quarter is decelerating to a 1.4% annual rate. The majority of economists opine that the growth rate is decelerating significantly in the ongoing January-March period, primarily due to the Federal Reserve's continuous hike in interest rates to control inflation. Elevated interest rates usually hinder economic growth and can frequently trigger a downturn.[4] Although Silicon Valley Bank experienced an unexpected collapse earlier this month, the Federal Reserve decided to increase interest rates once more to control inflation.[5]
0. “Gross Domestic Product, Fourth Quarter and Year 2022 (Third Estimate), GDP by Industry, and Corporate Profits” Forex Factory, 30 Mar. 2023, https://www.forexfactory.com/news/1213410-gross-domestic-product-fourth-quarter-and-year-2022
1. “Economic growth rate dips to 2.6% | The Blade” Toledo Blade, 31 Mar. 2023, https://www.toledoblade.com/business/development/2023/03/30/economic-growth-rate-dips-gdp/stories/20230331030
2. “US revises down last quarter's economic growth to 2.6% rate” Abccolumbia.com, 30 Mar. 2023, https://www.abccolumbia.com/2023/03/30/us-revises-down-last-quarters-economic-growth-to-2-6-rate
3. “U.S. Q4 GDP downwardly revised again to 2.6% in final estimate” Seeking Alpha, 30 Mar. 2023, https://seekingalpha.com/news/3952674-us-q4-gdp-revised-down-again-to-26-in-final-estimate
4. “U.S. GDP in fourth quarter trimmed again to 2.6% on weaker consumer spending” Morningstar, 30 Mar. 2023, https://www.morningstar.com/news/marketwatch/20230330369/us-gdp-in-fourth-quarter-trimmed-again-to-26-on-weaker-consumer-spending
5. “GDP grew at 2.6% rate in fourth quarter of 2022 despite pressure from rising rates” Washington Examiner, 30 Mar. 2023, https://www.washingtonexaminer.com/policy/economy/gdp-grew-at-2-6-rate-in-fourth-quarter-of-2022-despite-pressure-from-rising-rates
