Economic growth is expected to have slowed slightly in the fourth quarter but was still solid, driven by a strong consumer.Economists will be studying Thursday’s report on U.S. gross domestic product carefully for signs of how strong or weak the consumer actually was at the end of 2022. Retail sales suggest spending fell off sharply as the year came to an end. GDP is reported at 8:30 a.m. ET. related investing news 2 hours ago 6 days agoAccording to Dow Jones, economists expect that U.S. gross domestic product grew by 2.8% in the fourth quarter, down from the 3.2% pace in the third quarter.While economists see a strong fourth quarter, they are divided on where the economy goes from here and a key is the consumer. Some say the sharp 1.1% drop in December retail sales shows the consumer pulled back at the end of the quarter, possibly a prelude to recession. However, others say it’s too soon to count the consumer out, and the economy could still avoid a contraction.”I know the consensus view is recession is imminent, but I’m skeptical of that,” said Amherst Pierpont chief economist Stephen Stanley. If there is a recession, he expects it would be more likely in 2024. “I think we stumble through 2023.”But Kevin Cummins, NatWest chief U.S. economist, said he sees a recession on the horizon and he has penciled in a 1% decline in first-quarter GDP, after an estimated 3.2% gain in the fourth quarter.He said the Federal Reserve’s rate hikes have a lagged effect on the economy, and they have already sent housing into a recession. The slowdown in residential investment has taken a full percentage point off of growth in the fourth quarter, he said.”Real export growth is going to be weak. Inventories have been rebuilt enough that you’re not going to get much juice from that,” he said. “It just seems like all the major components in GDP are all on the same side going forward, pointing to weaker growth.”Cummins said the consumer was still strong in the beginning of the fourth quarter. “But the momentum since then has weakened pretty noticeably,” he said. “It seems like there’s going to be a pretty big hole to dig out of where you ended the fourth quarter. So the first quarter is going to start pretty weak.”KPMG’s chief economist Diane Swonk said the consumer slowed and so did the momentum in the economy at the end of the fourth quarter. She expects a shallow recession this year.”Fourth quarter-to-fourth quarter growth is about 0.8%. Year-over-year, …
GDP report could show solid fourth-quarter growth but still signal a recession is coming, economists say – CNBC
