U.S. GDP Growth Slowed In Fourth Quarter and In 2022

Brian Turner
26 Jan, 2023
New York City

Despite the multiple rate hikes last year, the U.S. economy continues to pace ahead on the back of resilient consumer spending and business investments. 

The U.S. economy expanded at a real 2.9% annual pace in the fourth quarter, slower than 3.2% in the third quarter, the Bureau of Economic Analysis said in a preliminary report. 

Compared to the third quarter, the deceleration in real GDP in the fourth quarter primarily reflected a slowdown in exports and decelerations in nonresidential fixed investment, state and local government spending, and consumer spending. 

Current‑dollar GDP increased 6.5% at an annual rate, or $408.6 billion, in the fourth quarter to a level of $26.13 trillion. 

In the third quarter, GDP increased 7.7% or $475.4 billion. 

The price index for gross domestic purchases increased 3.2% in the fourth quarter, compared with an increase of 4.8% in the third quarter. 

The PCE price index increased 3.2%, compared with an increase of 4.3%. 

Excluding food and energy prices, the PCE price index increased 3.9%, compared with an increase of 4.7%.

 

2022 Real and Current GDP Growth Slowed 

For all of 2022, real GDP expanded 2.1% following a 5.9% rise in 2021. 

Current-dollar GDP increased 9.2%, or $2.15 trillion, in 2022 to a level of $25.46 trillion, compared with an increase of 10.7%, or $2.25 trillion, in 2021. 

The price index for gross domestic purchases increased 6.8% in 2022, compared with an increase of 4.2% in 2021. 

The PCE price index increased 6.2%, compared with an increase of 4.0%. 

Excluding food and energy prices, the PCE price index increased 5.0%, compared with an increase of 3.5%.

 

Looming Recession in 2023 

Economists are estimating a mild recession may drag the 2023 growth near zero after seven rate hikes in 2022 and interest rates running at highs not seen in nearly 40 years.