Analysts have been predicting a bleak economic outlook in the US for the past few months or so now but Americans shouldn’t fret. After a prediction of about 1.5% growth for the last quarter of 2023 and a forecast of recession for the first quarter of 2024 with 0.2% growth, they couldn’t have been more wrong. The economy boasted a staggering 4.9% annualized growth rate in the final quarter of 2023. This occurred in large part thanks to massive consumer spending even in the face of the biggest interest rates in 23 years. Singapore is the only other industrialized country that spent more on Covid stimulus from 2020 to 2021 and it’s showing in consumer habits. People didn’t have the opportunity to spend and now that they’re back out with more money, they’re sending it every which way.
The annualized GDP actually slowed to a growth rate of 3.3% for the final quarter of 2023, but this proves us abreast of the rest when realizing that the combined GDP of the 20 countries that use the euro grew at just an annualized rate of 0.1% in the third quarter last year. Just as well, the UK is growing at an annualized rate of just 0.2% while Japan’s economy shrank by 2.1% from the year prior. Whenever there’s a boom like this, there’s an impending leveling out. However, as always with the US economy, who really knows?
4 comments:
Last semester, I studied the real estate market and loan counts and it was similarly recovering just as GDP is. Although it is still lower than previous years, it did recover and there are small glimpses of hope. This continues to make me wonder what will happen in the near future especially considering I want to buy a house in the future.
Half of me is curious if this is all going to lead to an unexpected recession or if it is going to level out and be fine. It just strikes me as odd that almost every other country is struggling in a sense while we're still staying afloat. Are we hanging by a thread or an iron bar? I'm worried to find out.
Though consumerism has become very rampant as of late so that may be the likly cause.
Im surprised that the annualized growth rate measured at 4.9%. Besides the increased consumer spending amid high interest rates what else do you think attributed to these metric being so high? It is also important to notice that the US outperformed many countries in the eurozone, the the UK and Japan. This could indicate that the US economy's resilience performance in the face of global economic challenges .
It is interesting to finally see the effects of stimulus checks. In a way, this was what saved America's GDP and kept it stable amidst the rise in inflation. In the beginning, people had mixed feelings about stimulus checks as they did not know what the long-term outcome would be. Thanks to the stimulus checks and markets opening back up, this means that people have more money to spend which contributed to the growth of America's GDP and could explain the slower growth from countries in Europe and in the UK. I am curious to know how Singapore is doing considering they spent more money on stimulus checks than America.
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