U.S. Economy Experienced a Solid Growth in Quarter 4

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The United States economy experienced robust growth, expanding at a solid 3.4 percent annual rate from October to December, according to a recent government report. This marks an improvement from the previous estimate of 3.2 percent growth for the same period. The revised figures from the Commerce Department confirmed a slowdown from the previous quarter’s sizzling 4.9 percent expansion, yet the growth observed last quarter was still considerable. This growth was sustained by increasing consumer spending, exports, and business investments in both buildings and software. Notably, it marked the sixth consecutive quarter with growth rates surpassing 2 percent.

Looking forward, projections suggest that the economy will continue to grow steadily in the first quarter of the current year, albeit at a slightly slower pace of 2.1 percent, as forecasted by the Federal Reserve Bank of Atlanta.

Moreover, the latest Gross Domestic Product (GDP) report indicated a moderation in inflation pressures. In the fourth quarter, the personal consumption expenditures price index rose at a slower rate compared to the third quarter. Core inflation, which excludes volatile food and energy prices, remained stable at 2 percent.

The resilience of the economy in the face of successive interest rate hikes by the Federal Reserve has defied expectations of widespread layoffs and recession. Despite the increased cost of borrowing, economic growth persisted, accompanied by robust job creation and a gradual cooling of inflation. This has instilled optimism that the Fed can successfully curb inflation without causing a recession, achieving what is termed a “soft landing.”

The recent GDP report represents the final estimate for the fourth quarter of GDP growth, with the Commerce Department scheduled to release its initial estimate for the January-March growth on April 25th.

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