Wednesday, May 31, 2023

US GDP grew less than expected in the fourth quarter

US economy suffers a 2.6% hike in interest rates In the October-December 2022 quarter the government reported this Thursday and made a slight cut from its previous count.

the previous estimate for the previous quarter An increase of 2.7% per year.

Growth in the gross domestic product – the total output of goods and services – of Q4 was 3.2% lower than Q3, Thursday’s report revised up exports and consumer spending.

In all of 2022, the Economy grew 2.1%Much lower than 2021’s 5.0%.

Most economists believe that growth is falling in the current January-March quarter, partly due to the Federal Reserve Constantly increasing interest rates to control inflation.

The resulting rise in borrowing costs has dealt a severe blow to the housing sector and made it more expensive for consumers and businesses to spend and invest in large purchases. As a result, many expects the economy to slip into recession this year.

The central bank Has increased its benchmark interest rate nine times in the last year. Those responsible for the Fed’s measures are betting on achieving what is called a soft landing: slowing growth enough to tame inflation without sending the world’s largest economy into recession.

But with borrowing costs rising in the economy, analysts doubt the United States can avoid a recession. The main debate is whether the recession will be mild, with minor losses to hiring and growth, or severe, with waves of layoffs.

During this, The labor market remains tight and puts upward pressure on wages, leading to inflation. Job creation remains healthy and the unemployment rate has fallen to its lowest level in half a century.

Thursday’s report was the Commerce Department’s third and final report on the fourth-quarter of 2022 GDP. The preliminary estimate of growth for the current quarter will be released on April 27. Data firm FactSet’s respondents estimate The growth rate is slowing down to 1.4% per annum in January-March.

World Nation News Desk
World Nation News Desk
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