Economic Report: U.S. GDP in fourth quarter trimmed again to 2.6% on weaker consumer spending

by | Mar 30, 2023 | Stock Market

The numbers: The growth rate of the U.S. economy at the end of 2022 was reduced to 2.6% due to weaker consumer spending while corporate profits posted the biggest decline in two years. Initially the government said gross domestic product has increased at a 2.9% annual pace. The estimate was reduced to 2.7% last month and now it’s been lowered once again. GDP is the official scorecard of the economy.

The U.S. could show a similar growth rate in the first three months of 2023, Wall Street forecasts show. Hiring and consumer spending have been stronger than expected, easing worries of a potential recession, at least for now. Adjusted pretax corporate profits, meanwhile, fell by a sharp 2% annual pace, or $60.5 billion. That’s the biggest decline since the end of 2020, reflecting both rising labor costs and a slowdown in business. Key details: The downward revisions in fourth-quarter GDP were largely the result of consumer spending being much weaker than previously reported. The increase in consumer spending was reduced in the latest estimate to 1% from 1.4% last month and an original 2.1%. Business investment, on the other hand, turned out to be much stronger and mostly offset the drag from consumer spending. Overall busi …

Article Attribution | Read More at Article Source

Share This