The United States Economy grew more than expected in the last months of 2023, a year that closed with a GDP expansion of 2.5 percent, above the 1.9 percent of 2022, the Department of Commerce.
With the electoral campaign underway and the president Joe Biden seeking re-election, the world's largest economy had growth in the last quarter of 3.3 percent in annual projection (the expansion of GDP over 12 months if the conditions at the time of measurement continued).
The last quarter showed a moderation of the economic activity, with an expansion that falls from 4.9 percent in annual projection in the third quarter of the year. But the data still exceeds the 2 percent that the market expected, according to the consensus collected by the consulting firm. MarketWatch.
What drove economic growth?
This GDP performance was supported by a strong labor market and consumer spending. Wages rose and, from mid-2023, the increases were greater than the price increases.
Thus, consumption, the main driver of US growth, remained solid despite the impact of inflation on purchasing power. The fourth-quarter expansion “reflects increases in consumer spending, exports, and state and local government spending,” the Commerce Department said.
This GDP performance was supported by a strong labor market and consumer spending.
Fears of a recession are frightened
Thus, The United States escapes a recession in 2023a scenario frequently outlined as a possibility by economists, in a context of high interest rates to contain inflation.
“Economic growth has been more resilient than we anticipate in 2023,” admitted Nationwide's chief economist, Kathy Bostjancic, in dialogue with AFP.
The political challenges
The government, taking advantage of this “soft landing” of the economyas the expansion of GDP is called despite high interest rates, tries to capitalize on the numbers of the economic policy attributed to Democratic President Joe Biden, which they have called “Bidenomics.”
“Salaries, wealth and employment are higher now than before the pandemic,” the president said in a statement.
“This is three years in a row of growth,” he added. Biden will possibly face a duel with former Republican President Donald Trump (2017-2021), who has among his campaign arguments the good health of the American economy when he commanded the White House, but also the finances of families, before the shooting. of prices.
Republicans blame Biden for inflation. Surveys that measure household confidence are, however, beginning to improve. The issue is central to the presidential election next November.
To contain inflation, which reached 9.1 percent in June 2022, a peak since the 1980s, the Federal Reserve (Fed, central bank) increased its interest rates 11 times between March of that year and July 2023.
High rates make credit more expensive, and therefore discourage consumption and investment, thus eliminating pressures on prices. Since then, inflation fell to 3.4 percent over 12 months according to the December measurement.
The Fed's goal is to take it to 2 percent. But the central bank has already signaled that its goal is to cut interest rates this year, easing access to credit for Americans. The Fed will surely keep its rates in a range between 5.25 and 5.50 percent for now at its monetary policy meeting on Tuesday and Wednesday of next week.
It should be noted that some media in the United States reported that the growth was 3.1 percent. This is because certain analysts take the growth from the fourth quarter of 2022 to the fourth quarter of 2023, which would give 3.1 percent as data, a little higher if only real growth is measured in all of 2023, which was of 2.5.
Measured from the fourth quarter of 2022 to the fourth quarter of 2023, as typically reported by local media in the United States, real GDP increased 3.1 percent during this period.
*With AFP
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