Update on the US Economy
The US has recently seen a wave of economic data come through, and some of it needs to be sorted out to show what the future quarters have in store for us. As the first quarter of 2023 commences, there are a few things to look out for.
US GDP numbers weren’t the greatest as the final revision was made to the fourth quarter of 2022, the final number being a 2.6 percent increase. Economists expected a revision down to 2.7 percent, and it was unfortunate to see the US economy slow from the 3.2 percent growth rate in the third quarter of 2022. Consumer spending expectations were also lower, with the final number being a one percent increase in consumer spending after the first estimate landed at a 2.1 percent increase. Analysts believe that 2023 might not be much nicer to the economy as recent developments like the banking crisis have hampered economic growth expectations, another development in this first quarter that we might see reflected on future data.
When it comes to the US labor market, things are still looking extremely tight as unemployment claims rose very minimally last week. Although layoffs continue to flood our news feeds, there aren’t a significant number of jobs being lost, and there are currently 1.9 job openings for every unemployed person in the United States. However, the banking crisis comes here yet again as the closing of regional banks and stress on the system will hurt consumers from borrowing and accessing lines of credit, which could cause larger layoffs and hurt those who are unemployed. The coming months will be interesting when it comes to economic data so we can see how much the banking crisis has truly affected the economy, and whether a slowdown is to come.
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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.