(BBC News) The world’s largest economy expanded at an annual rate of 3.3% over the three months to December, the Commerce Department said.
That was down from 4.9% in the prior quarter, but much faster than the 2% many analysts had expected.
For 2023, the economy grew at an annual rate of 2.5%, up from 1.9% in 2022.
The figures cap a year that has been characterized by unexpected economic resilience, as the U.S. central bank raised borrowing costs sharply and inflation cooled.
“Whichever way you slice it, this report caps a year of stellar economic growth performance,” said Olu Sonola, head of U.S. regional economics at Fitch Ratings. “The momentum of economic growth going into 2024 is looking very good.”
The figures are a boon for President Joe Biden, who has struggled to convince the public that the economy remains healthy, as it downshifts from the boom after the pandemic shock.
In a speech in Wisconsin on Thursday, he argued that White House policies, including investments in green energy, roads and other infrastructure, have contributed to the resilience.
“Experts, from the time I got elected, were insisting that the recession was just around the corner,” he said. “Well, we’ve got really strong growth…. We obviously have more work to do, but we are making real progress.”
Biden said he believed the message was starting to get through.
In recent months, surveys have shown consumer sentiment improving. The stock market is up, gasoline prices are down, and unemployment remains low.
While the jump in prices since 2019 remains a sticking point for voters, the inflation rate has also eased, falling to 3.4% in December, after soaring to more than 9% in 2022.
Many economists had expected households to cut back spending as prices eroded their budgets and for business activity to cool in the face of more expensive borrowing costs, warning of the risks of a downturn, or recession.
But that scenario has not materialized, as high savings left over from the pandemic, an uptick in wage growth, and other government spending provided a cushion. Compared with the fourth quarter of 2022, the US economy grew 3.1%.
https://www.bbc.com/news/business-68096633