The US Economy Surpasses Expectations In Terms Of Growth - Texas Today

Even though higher borrowing costs and rising living costs slowed growth, the US economy did better than expected at the end of last year.

According to official numbers, the US economy grew at an annual rate of 2.9% in the last three months of 2022.

That was less than the 3.2% in the previous quarter because home sales and buildings fell.

Even though the job market has been stable, some analysts are worried that the US economy is heading for a recession.

The unemployment rate is close to a record low, but other parts of the economy are getting worse.

Even though December is usually a big shopping month, retail sales dropped 1.1% from November to December.

The economy has also hurt manufacturing, and the stock market dropped sharply last year.

According to a report on Thursday, housing investment, which is affected by interest rates, fell at an annual rate of almost 27% in the three months leading up to December. This happened because fewer new homes were being built.

But consumer spending, the main thing that keeps the US economy going, kept going at a steady, if slower, pace.

For the whole year, the economy grew by 2.1%. However, after the pandemic, the economy grew by 5.9% last year, which was the fastest rate since 1984.

Prices went up quickly because of this rise, so the US central bank had to act to keep prices stable.

Last year, the Federal Reserve raised interest rates from nearly zero to more than 4%, the highest rate in 15 years.

The bank hopes that people will save more and spend less by making it more expensive to borrow. This will help keep prices from going up too quickly. But it could slow things down so much that millions of people would lose their jobs.

More news has come out about job cuts. This week, many lost their jobs at large companies like 3M, Dow, IBM, and SAP. On the other hand, some, like the Chipotle chain of restaurants, are hiring more people.

Fed officials have said that they still hope the economy can change without causing a lot of people to lose their jobs. But this would mean their plan to raise interest rates might end with a “soft landing.”

“Since almost a year ago, the Federal Reserve has been working toward a “soft landing” by raising short-term interest rates just enough to lower inflation without starting a recession. Even though the Fed is trying to help the economy, it is still doing pretty well, so they’re doing a good job. Richard Flynn, the head of Charles Schwab UK, said this.

However, investors may worry that today’s numbers don’t tell the whole story because other recent data points to a recession…Read more

Source — Texas Today