The US closes 2023 with growth of 3.1% and says goodbye to fears of recession

USA This Thursday, it definitively buried the fears of a recession that aroused at the beginning of last year and closed 2023 with a growth in the Gross Domestic Product (GDP) of 3.1% thanks to the increase in consumer spending despite inflation.

The figure is higher than estimated by economists and higher than the 2.1% of the growth recorded in 2022, the year in which the world’s first economy suffered a technical recession.

Data of the Bureau of Economic Statistics (BEA) published this Thursday show, however, that in the fourth quarter growth slowed and the US economy only grew 0.8%, compared to 1.2% in the third quarter.

For its part, according to the first estimated GDP figures (two revisions will be published in the coming months), the annual growth rate in the last quarter of the year was 3.3%, compared to the 4.9% recorded a quarter before.

The increase in real GDP in 2023 primarily reflected increases in consumer spending, nonresidential fixed investment, state and local government spending, exports, and federal government spending.

These increases were partially offset by decreases in residential fixed investment and investment in private inventories. And also due to a decrease in imports.

The increase in consumer spending was on both services and goods. Within services, the main contributors to the increase were food and accommodation services, as well as healthcare.

Within goods, the increase was led by other non-durable goods, as well as recreational goods and vehicles.

The data is known with one week left before the Federal Reserve (Fed) hold its first monetary policy meeting of the year (on the 30th and 31st), in which data like this will be key to making decisions on interest rates.

According to most experts, the US regulator will keep them in the current range, in the range of 5.25% and 5.5%, its highest level since 2001, as it did in previous meetings.

The minutes of its last meeting, published at the beginning of the month, show that the US central bank considers that interest rates have reached their peak, but leaves the door open to order future increases if economic conditions require it.

GDP is one of the data that the regulator closely analyzes, along with inflation, which in December abandoned its downward streak. Prices rose three tenths year-on-year and inflation closed the year at 3.4%.

This indicator had been falling in year-on-year terms since October and the rise therefore represented a setback for the Fed’s objectives of returning it to 2%.

The US labor market is another of the data analyzed by the Fed and, far from cooling, it continues to remain solid.

In December, the net creation of new jobs rose again in the last month of the year and 216,000 positions were created, 43,000 more than those generated a month before and the unemployment rate remained at 3.7%, a figure that did not It seems to indicate that the labor market has suffered from the rate increases.