GDP in One Chart: U.S. Economy Beats Expectations Again

The US economy expanded an annualized 3.3% in the last three months of 2023, much better than market forecasts of a 2% rise, and following a 4.9% rate in Q3, according to the advance estimate.

The sharp increase came due to contributions from consumer spending, increased inventories, exports, and government spending.

Personal consumption expenditures rose by 2.8% for the quarter. Consumer spending on goods and services saw a rise of 3.8% and 2.4%, respectively. Exports surged by 6.3%.

Gross private domestic investment also rose by 2.1%, while government spending and investment increased by 3.3%.

Considering full 2023, the US economy grew 2.5%, compared to 1.9% in 2022 and Fed's estimates of 2.6%. The figures showed the Fed's tightening campaign took a hit on the economy, but the toll was less severe than initially anticipated as a tight labour market continues to support consumer spending.