JANUARY 29, 2024 – GDP RISES TO 3.3 PERCENT IN Q4
The US economy grew at an annualized rate of 3.3 percent in the last quarter of the year, significantly beating analysts’ expectations for 2 percent. Record holiday retail spending was a factor in pushing the growth rate, as well as spending by the government. For 2023, the full year GDP growth came in at 2.5 percent, this despite high interest rates, high inflation and recession fears. GDP growth was 1.9 percent in 2022.
Data was also released on the personal consumption index, the Fed’s preferred inflation measure. The PCE was up 2 percent for the final quarter of 2023. On a year-over-year basis, the PCE was up 2.7 percent, down from 5.9 percent a year ago.
The Federal Reserve has hinted that three interest rate cuts are possible in 2024 if economic conditions warrant. The Fed does not want to act too soon, or too quickly, for fear of rebound inflation. Futures markets believe the first rate-cut will happen in May, while the CME Group’s FedWatch predicts the odds of a March rate cut at 47 percent.