Green GDP – The US GDP Data
The most known economic indicator must be gross domestic product, more commonly known as GDP. Variations of GDP, or the market value of all goods and services in a country, are utilized to determine the general health of a country because raw data often has inaccuracies. Economists and investors have been awaiting the US GDP data due to the current worries about the economy, and they received just that on Thursday.
In the fourth quarter of 2022, US GDP rose at a 2.7 percent annual rate when accounting for inflation and seasonality. The expected number was 2.9 percent, but when looking back at the end of last year there are many things that explain the slowdown in economic growth. Holiday season was unexpectedly slow for retailers, causing a dent in consumer spending and the government revising their estimates. Business spending also slowed last quarter as a result of the cooling economy, showing the marks of persistent inflation and high interest rates.
This economic report seems out of place from all of the news recently, and that is simply because the economy seems to be turning the page this first quarter of 2023. The disappointing holiday season was met with extremely strong retail data for the month of January, rising by a significant margin in response. To the demise of the Federal Reserve, the labor market showed itself stronger than ever last month, another positive mark for the economy at the moment. Economic news has been fairly positive recently, and that is expected to factor in when we receive the GDP for the current quarter. Economists believe that growth will continue to slow in future quarters as the current conditions have given the Fed a greater incentive to continue hiking interest rates, and that a recession is still possible but a mild one at worst.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.