The U.S. economy outperformed expectations in the fourth quarter of 2023, with real GDP growth rising by 3.4 percent, higher than the previously announced increase of 3.2 percent, according to a report released Thursday by the Commerce Department. Economists had predicted that the growth rate would remain unchanged, but the revised data showed that consumer spending and nonresidential fixed investment were up, while private investment in inventories was down.
Sam Millette, Director of Fixed Income for the Commonwealth Financial Network, noted that this strong growth at the end of 2023 has carried over into 2024, indicating economic resilience. Despite an upward revision in GDP growth for the fourth quarter, it marked a significant slowdown from the 4.9 percent increase in the third quarter due to a reduction in private investment in inventories and a slowdown in federal government spending and residential fixed investment.
The report highlighted that GDP growth in the fourth quarter was driven by increases in consumer spending, state and local government spending, exports, non-residential fixed investment, federal government spending and residential fixed investment. However, these positive contributions were partially offset by a decrease in private inventory investment and an increase in imports. On inflation fronts