In the fourth quarter of 2023, the U.S. economy surpassed expectations, with real GDP growth increasing by 3.4 percent instead of the previously reported 3.2 percent increase. Economists had predicted that the GDP growth rate would remain unchanged, but the report revealed that consumer spending and nonresidential fixed investment were upwards revised, while private inventory investment was downwardly revised.
According to Sam Millette, Director of Fixed Income for Commonwealth Financial Network, the strong growth at the end of 2023 has carried over into 2024, indicating economic resilience. Despite this upward revision, the GDP growth in the fourth quarter marked a significant slowdown from the 4.9 percent increase seen in the third quarter due to downturns in private inventory investment and federal government spending.
The report highlighted that GDP growth in the fourth quarter was driven by increases in consumer spending, state and local government spending, exports, nonresidential fixed investment, federal government spending, and residential fixed investment. However, these positive contributions were partly offset by a decrease in private inventory investment and an increase in imports, which subtract from the GDP calculation. On the inflation front