• Sun. May 26th, 2024

US Economy Surprises with Strong Fourth Quarter Growth: GDP Increases by 3.4% and Corporate Profits Reach Record High

BySamantha Jones

Mar 28, 2024
Corporate profits reach new heights

In the fourth quarter, the U.S. economy experienced strong growth, with GDP increasing by 3.4 percent, surpassing expectations of 3.2 percent but falling short of the substantial 4.9 percent growth in the third quarter. Adjusted profits after taxes reached a record high of $2.8 trillion, seeing a 3.9 percent increase, exceeding the anticipated 3.3 percent rise.

Corporate profits spiked in the fourth quarter, reaching a new all-time high, as noted by economist Lydia Boussour from EY in her analysis. Before-tax corporate profits saw the most significant increase since the second quarter of 2022, rising by $133 billion. Profit margins expanded for the second quarter in a row, climbing by 0.3 percentage points to 12.2 percent of GDP due to increased productivity balancing out unit labor costs.

Inflation dropped to 2 percent in the fourth quarter based on the “core” PCE price index, which excludes food and energy prices – the preferred inflation measure by the Federal Reserve. New monthly core PCE data is set to be released on Friday, indicating a 2.8 percent year-over-year increase in January’s core PCE price index (CPC).

Market analysts were pleased with the latest GDP figures and commended positive contributions from consumer spending and nonresidential fixed investment to upward revisions of GDP growth rates. Michelle Cluver, head of ETF portfolios at Global X highlighted that consumer spending continues to drive economic growth despite global economic challenges and supply chain disruptions caused by COVID-19 pandemic restrictions and lockdowns.

Additionally, economists note that while inflation remains relatively low compared to historical averages during this time period, it is still an important factor for policymakers to monitor closely as they consider future monetary policy decisions.

Overall, these latest GDP figures suggest that despite some challenges faced by businesses over this past year due to supply chain disruptions caused by COVID-19 pandemic restrictions and lockdowns across many regions globally around

By Samantha Jones

As a content writer at newsnnk.com, I weave words into captivating stories that inform and engage our readers. With a passion for storytelling and an eye for detail, I strive to deliver high-quality and engaging content that resonates with our audience. From breaking news to thought-provoking features, I am dedicated to providing informative and compelling articles that keep our readers informed and entertained. Join me on this journey as we explore the world through the power of words.

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