Economic Report: U.S. economy grew at slower 2.7% pace at end of 2022, updated GDP shows

by | Feb 23, 2023 | Stock Market

The numbers: The economy grew a touch slower at a 2.7% annual pace at the end of 2022, revised government figures show, largely because consumers cut back on spending. The increase in gross domestic product, the official scorecard of the economy, was lowered from an initial 2.9% growth rate.

Consumer spending, the main engine of the economy, grew at a 1.4% annual clip instead of 2.1% as originally reported. That mostly explained the downgrade in GDP. The slowdown in spending suggests the new year got off to a weak start. Economists say the U.S. will will be hard-pressed to match even the modest performance of the fourth quarter in the first three months of 2023. Early economic data indicate the U.S. is on track to expand at a far slower pace or even contract. Rising interest rates and high inflation have forced consumers and businesses to trim spending and investment, most notably in interest-sensitive sectors such as housing and construction. Big picture: The U.S was widely expected to slip into recession in 2023 as the Federal Reserve tightened the screws. The Fed plans to keep raising interest rates to snuff out inflation, putting an expansion that began in mid-2020 at risk. C …

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