The latest data for US GDP has been released. The economy grew at an year-on-year rate of 2.9% compared to the end of December 2022. However, this marked a slight slowdown on the third quarter of 2022 which stood at 3.2%.
Particularly poor sectors such as home sales and construction played a factor in the hiccup as did less-than-expected sales over the Christmas period.
The data shows an overall year GDP increase of 2.1% for the US, exceeding the G7 as well as the Eurozone. It is slightly lower than that of the OECD average. Despite positive GDP data as well as historic unemployment lows, inflation and comparably high interest rates are still putting US consumers under pressure. While the nation’s economy is growing, not everyone is reaping the benefits.
Recession still on the cards
These interest rate hikes in particular are of real concern to economists who far that rates set too high could spiral the US into recession.
“It’s clear the economy remains relatively strong in the face of the Fed’s efforts, suggesting they’re succeeding,” said Richard Flynn, managing director at Charles Schwab UK. “However, investors may fear that today’s figures are somewhat deceiving as other recent data has pointed towards a recession.”