US economy grew solid 3.2% in fourth quarter, a slight downgrade from government’s initial estimate

The U.S. economy grew at a solid 3.2% annual pace in the fourth quarter of last year, driven by strong consumer spending, according to the Commerce Department. While this figure is slightly lower than the initial estimate, it still reflects robust economic activity. Despite concerns about high interest rates, the U.S. has seen continuous growth above 2% for six consecutive quarters, surpassing expectations. Consumer spending, which makes up a significant portion of economic activity, increased by 3% during this period, while state and local government spending also rose significantly. Additionally, exports contributed to the growth.

Inflation pressures have eased slightly, with the Federal Reserve's preferred measure of prices rising at a 1.8% annual rate in the fourth quarter. Despite this, consumer prices remain higher compared to three years ago, contributing to public frustration, particularly in an election year.

The Fed's aggressive response to inflation, including multiple interest rate hikes, has helped to curb inflationary pressures without significantly harming economic growth. The unemployment rate has remained below 4% for a record 24 months, and employers continue to add jobs at a healthy pace.

The combination of easing inflation and strong economic indicators has raised hopes for a "soft landing," where inflation is controlled without triggering a recession. Economists anticipate further rate cuts by the Fed in 2024 to support continued growth.

Source- https://apnews.com/article/economy-inflation-federal-reserve-gdp-unemployment-22f096fe881d4a48314c67d6f4cc67ba