US fourth-quarter GDP reflects downward consumer spending

Economic growth of US in the fourth quarter was weaker than previously estimated, reflecting a downward revision to consumer spending.

Inflation-adjusted gross domestic product, or the total value of all goods and services produced in the US, increased at a 2.7% annualized rate during the period, Commerce Department data showed Thursday. The figure compares with a previously reported 2.9% advance.

The report point to an economy that was losing steam at the end of 2022. Stripping out trade, government spending, and inventories, a key gauge of underlying demand known as inflation-adjusted final sales to private domestic purchasers rose just 0.1%, the weakest since the start of the pandemic.

AN increase household expenditures annualized 1.4% in the final three months of 2022, driven by a third-straight quarter of decline in spending on durable goods such as motor vehicles. Consumer spending was previously estimated as rising by 2.1%.

While the rapid slowdown in personal spending in particular spurred concerns about the health of American consumers, it also bolstered hopes that the economy was slowing in a way that could be consistent with a so-called soft landing.

Recent figures, however, point to a rebound in consumer spending at the start of 2023 and a startlingly strong job market highlighted by the lowest unemployment rate in more than 53 years.