US Economy a Long Way from Recession in Q4, GDP Grew 2.9%

The US economy increased at an annual rate of 2.9% in the fourth quarter, ahead of consensus 2.6%. The report followed a 3.2% increase in the third quarter. The report suggests the economy was resilient and held on in the fourth quarter in the face of rising interest rates, moderating consumer spending (and inflation), political uncertainty and falling sentiment. The GDP Price Deflator was up 3.5% (consensus 3.2%) following a 4.4% increase in the third quarter. The Q4 PCE Price Index was up 3.2% versus 4.3% in the third quarter. The core PCE Price Index increased 3.9% versus 4.7% in the third quarter.

US Factory Worker

U.S. Advance Q4 GDP Highlights

  • US Q4 advance GDP +2.9% vs +2.6% expected.
  • Final Q3 reading was +3.2% annualized, Q2 was -0.6% annualized.
  • For full 2022, the GDP expanded 2.1%.
  • Real GDP increased 2.1% in 2022 versus 5.9% in 2021.
4Q22 U.S. real GDP +2.9%
United States Full Year GDP Growth
  • GDP deflator +3.5% vs +3.3% expected
  • Core PCE +3.9% vs +4.0% expected
  • Personal consumption expenditures increased 2.1% versus 2.3% in the third quarter and added 1.42 percentage points to growth.
  • The PCE Price Index increased 6.2% in 2022 while the core PCE Price Index increased 5.0%.
United States GDP Deflator
  • Spending on goods was up 1.1% led by motor vehicle and parts, versus down 0.4% in the third quarter
  • Spending on services was up 2.6% with health care, housing and utilities, and personal care services leading the rise versus 3.7% in the third quarter.
  • Gross private domestic investment increased 1.4% led by petroleum, coal products, chemicals and utilities after declining 9.6% in the third quarter and added 0.27 percentage points to GDP growth.
  • Exports decreased 1.3% versus increasing 14.6% in the third quarter.
  • Imports decreased 4.6% after declining 7.3% in the third quarter. Net exports added 0.56 percentage points to GDP growth
  • Fixed investment declined faster (-6.7% vs -3.5%), led by equipment (-3.7% vs 10.6%).
  • Residential investment continued to contract (-26.7% vs -27.1%), led by new single-family construction and brokers’ commissions.
  • Government spending increased 3.7% after increasing 3.7% in the third quarter, and added 0.64 percentage points to GDP growth.
  • The personal savings rate, as a percentage of disposable personal income, increased to 2.9% from 2.7% in the third quarter.
United States GDP Growth Rate
United States GDP Growth Rate

Source: Bureau of Economic Analysis

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