US Economy Continues to Surge, with Fourth Quarter GDP Growth at 3.4%

Published / Modified Mar 28 2024
Source: U.S. Bureau of Economic Analysis, CSIMarket Team / CSIMarket.com

The latest economic report indicates that the United States experienced robust economic growth in the fourth quarter of 2023.
According to the third estimate, real gross domestic product (GDP) increased at an annual rate of 3.4 percent, slightly lower than the third quarter's growth rate of 4.9 percent.
However, this solid growth was driven by several key factors, including increased consumer spending, state and local government spending, exports, nonresidential fixed investment, federal government spending, and residential fixed investment.
These positive trends were partly offset by a decrease in private inventory investment, while imports, which subtract from the calculation of GDP, increased.

The growth in the fourth quarter was primarily led by improvements in investments, exports, and government spending.
Gross domestic product reached $27,957 billion, an increase from $27,645 billion in the previous quarter on a seasonally adjusted basis.
Exports, in particular, experienced a significant boost of 5.1 percent, contributing to the overall expansion.
This broad-based economic growth suggests that the U.S. economy is on a self-sustaining path.

The newly revised growth figures further support the notion that the economy remains in a strong state.
Additionally, salaries and worker wages grew by 1.23 percent quarterly, demonstrating positive trends in labor market conditions.
Gross National Product also rose by 3.1 percent over the past 12 months, indicating widespread economic growth across the board.

Government spending saw a notable increase of 4.6 percent, with federal spending rising by 2.4 percent.
National defense spending alone accounted for 3.66 percent of the nation's total output and 20.98 percent of total government spending.

Consumer spending, a crucial component of economic activity, grew by 3.3 percent in the fourth quarter.
It accounted for 68.42 percent of economic activity on a seasonally adjusted basis, with medical care witnessing the most substantial growth of 2.46 percent.
Spending on U.S.-made goods increased by 2.9 percent, with durable goods experiencing notable growth of 3.2 percent.
Demand for nondurable goods also increased, particularly for other nondurable goods, which grew by 3.4 percent.
The service sector, a key sector in the U.S. economy, expanded by 3.0 percent, driven by growth in medical care.

Final sales for domestic products, which exclude inventories and trade, increased by 3.9 percent in the fourth quarter, further underlining strong domestic demand.

In terms of investments, gross private domestic investments surged by 0.7 percent to $4,954 billion, contributing to less than half of the growth in Gross Domestic Product.
Housing investments grew at a 2.8 percent annual pace, adding -0.08 of a percentage point to growth.
However, purchases of software and equipment declined by -1.10 percent.
Overall, the broad-based growth in investments signals that both businesses and consumers are feeling confident about future economic prospects.
Businesses increased investment by 3.7 percent.
On the downside, slower inventory buildup acted as a major drag on growth, subtracting -0.39 percentage points from GDP growth.

Corporate profits also experienced a quarterly increase of 4.07 percent, reflecting the positive momentum in the economy.
Moreover, exports rose by 5.1 percent in the fourth quarter, while imports increased by 2.2 percent.
Net exports contributed 0.45 of a percentage point to growth, continuing to drive economic expansion.

Looking at the year 2023 as a whole, U.S. output climbed by 2.5 percent, surpassing the 1.9 percent growth recorded in 2022.

Overall, this latest economic report indicates that the U.S. economy is experiencing robust growth and remains on a solid trajectory.
The positive trends observed in increased consumer spending, investments, exports, and government spending have had a favorable impact on shareholders and investors.
The strong performance of the economy emphasizes the potential for continued growth in the future, fostering optimism among stakeholders.


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