The U.S. economy expanded much faster than expected in the fourth quarter of 2023 due to stronger consumer spending, while proving a lot of experts wrong on their forecast for a recession amid a series of interest rate hikes by the Federal Reserve to bring down inflation.
Gross Domestic Product (GDP) of the U.S. in the final quarter of last year was at 3.3%, largely beating expectations for a 2.0% growth in the quarter.
Since March 2022 the Fed has increased rates to a 22-year high at 5.25-5.50% to fight multi-decade high inflation rate that rose to as high as 9% in June 2022. The Consumer Prices Index came down to as much as 3% in June 2023, but since then started to rise at a slower pace to 3.4% in December as consumer spending grew and resilience in the labour market.
For the whole year, the U.S. economic growth rose 2.5%, also well above Wall Street’s expectations and a 1.9% growth in 2022.
