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US Authorities Revise Economy Fourth-Quarter Growth

In the United States, the local economic system showed growth in the fourth quarter of last year, which turned out to be higher than initially expected.

US Authorities Revise Economy Fourth-Quarter Growth

The mentioned result is conditioned by several factors. In this case, an important source of impact on the positive dynamic of the economic system of the United States was the increase in consumer spending. Also, one of the factors that impacted the specified result was the revitalization of investing in nonresidential structures, such as factories, by business representatives.

In the fourth quarter of 2023, the gross domestic product (GDP) of the United States showed growth of 3.4% compared to the figure for the same period in 2022. The relevant information was released by the Bureau of Economic Analysis of the US Department of Commerce. The mentioned data were obtained after the third estimate of GDP for the last quarter. It is worth noting that before the revision of the specified indicator, information arose in the public space that GDP grew by 3.2%.

The revision of the data was a kind of reflection of the trend of increasing consumer spending in the United States. Also, in this case, the expenses of the municipal authorities were taken into account. Moreover, there was considerable attention to increasing the volume of investments in fixed nonresidential assets.

Economists interviewed by the media expected that in the United States, the GDP figure for the fourth quarter of 2023 would not show any significant changes and would remain within what can be called static stability.

The US economy is currently on a growth trajectory. The dynamic of this process exceeds the rate of 1.8%, which Federal Reserve officials characterize as non-inflationary. Also, the growth of the United States economy is higher than the intensity demonstrated by similar systems in other countries. The fact that the central bank of the United States has raised interest rates by 525 basis points since March 2022 has not been a barrier to this result. The financial regulator has taken appropriate decisions as part of the implementation of a package of measures aimed at countering the inflationary process.

In terms of income indicators, the economic system of the United States in the fourth quarter of 2023 showed strong growth of 4.8% year-on-year. Between July and September last year, US gross domestic income (GDI) increased by 1.9%. In this case, it implies a change in the indicator compared to the same three months of 2022.

GDP and GNI should theoretically be equal, but in the practice plane, the corresponding figures differ because the assessment is carried out using different and largely independent source data.

The gap between the mentioned indicators was widening in the previous quarters. Against this background, some experts had concerns that the economic system of the United States is not in such a strong condition, as evidenced by GDP data, the sharp growth of which has affected the increase in wages.

Currently, there is observed a stable labor market situation in the United States. This state of affairs is a kind of backing factor for the country’s economic system. Stability in the labor market stimulates the growth of consumer spending.

A separate report from the United States Department of Labor, released on Thursday, March 28, indicates that initial claims for government unemployment benefits decreased by 2,000, amounting to 210,000 seasonally adjusted for the week ended March 23. Economists had forecast 212,000 claims. Since February, this figure has ranged from 200,000 to 213,000.

Currently, in the United States, most employers are not reducing the workforce, despite a series of high-profile layoffs in early 2024.

US corporate profits in the fourth quarter of 2023, including inventory valuation and capital consumption adjustments, increased $133.5 billion. Profits of domestic non-financial corporations grew by $136.5 billion.

Inflation in the United States is currently on a gradual downward trajectory. Having reached a peak of 9.2% in June 2022, this indicator has made a kind of reverse movement to the mark of 3.2%. The Fed’s inflation target is 2%.

As we have reported earlier, Federal Reserve Governor Lisa Cook Says About Importance of Cautious to Policy Easing.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.