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US Growth Keeps Surprising, Tops Forecasts in 2023

The US economy's performance in the fourth quarter surpassed forecasts, propelled by diminishing inflation that spurred consumer spending and marked a strong conclusion to a year that defied recession predictions. The real gross domestic product (GDP) expanded at an annualized rate of 3.3% in Q4 of 2023, significantly outdoing the anticipated 2.0%. The growth rate for the year was 3.1%, and the total expansion for 2023 stood at 2.5%.

This growth notably exceeded expectations, corroborating earlier data that indicated a robust end to 2023. Personal spending, a critical catalyst for economic growth, rose at a 2.8% rate. Additionally, contributions from business investment and the housing sector played a significant role in boosting the quarter's growth beyond forecasts. Our Take: The US economy concluded the year on a strong note, clearly surpassing the anticipated slowdown. It also shows the strongest growth amongst developed markets right now. The resilience of US consumers, seemingly unaffected by the rising interest rates, played a key role. This robust performance is likely to delay any expectations of rate cuts and bolster confidence in US equities and the US dollar.


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