US Economic Growth In Last Quarter
WASHINGTON: The US economy growth at a 2% annual pace from January to March as consumers spent at the fastest pace in nearly two years, the government said on Thursday in a sharp upgrade from its previous estimate. The government had previously forecast that the economy would expand at a 1.3% annual rate in the last quarter.
The Commerce Department’s third and final report on January-March economic growth pointed to surprising resilience, but still showed growth decelerating to a 2.6% annual rate from October to December and 3.2% from July to September. , The economy has been slowed by the Federal Reserve’s aggressive campaign to control inflation through a series of interest rate hikes beginning last year.
Yet Thursday’s report on the country’s gross domestic product — the total output of goods and services — showed why the economy has so far managed to defy expectations of an impending recession: consumer spending has been rising despite ever-increasing borrowing costs. are continuing to do.
Their spending, which fuels about 70% of the economy, grew at a 4.2% annual rate in the January-March quarter, the most since April-June 2021. The economy grew despite a cut in trade inventories, which was 2.1 percentage points lower than last year. Quarterly growth rate.
The Fed has raised its benchmark interest rate 10 times since March 2022 in its assault on inflation, which peaked at a four-decade high of 9.1% last year but has since slowed to 4%. The central bank’s rate hikes have increased the cost of mortgages, auto loans, credit cards and business borrowing and there is widespread forecast that an economic recession is inevitable. But the economy has proved unexpectedly durable.
Retail sales grew last month despite pressure from still-high inflation and rising borrowing costs. Government reports have shown that sales of new homes and orders for long-lived manufactured goods have increased recently and helped US economic growth . And employers have added an average of 314,000 jobs per month so far this year, with the unemployment rate at 3.7%, still near a half-century low.
In the current April-June quarter, the economy is believed to be slowing down further but is still managing to maintain its growth. Economists surveyed by data firm FactSet forecast annual growth for the quarter to be 1%. US economic growth has been revised up to 2% annual rate.
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