Stock prices in the U.S. rebounded on Thursday, recovering from a mixed trading session, following the release of positive economic indicators. The S&P 500 set a new record with a 0.17% increase, driven by gains in Micron Technology, while the Nasdaq Composite was up 0.16%. The Dow Jones Industrial Average also saw a rise of 0.46%.
Revised government data by the Commerce Department’s Bureau of Economic Analysis (BEA) revealed that the U.S. economy grew more than previously estimated in 2023. Despite significant interest rate hikes by the Federal Reserve, both business investment and consumer spending contributed to the economic expansion.
According to BEA’s Associate Director of National Economic Accounts, Dave Wasshausen, the overall assessment of the economy remains consistent. Gross domestic product (GDP) for 2023 was revised up to 2.9% from the initial estimate of 2.5%, with improvements in residential investment playing a key role in the adjustment. Additionally, growth for 2022 was revised to 2.5%, highlighting increases in consumer spending and business investment.
The Federal Reserve implemented substantial interest rate hikes in 2022 and 2023 but recently made its first reduction in borrowing costs since 2020 by cutting the overnight benchmark interest rate by 50 basis points to a range of 4.75%-5.00%. The BEA’s revisions also encompassed national accounts data from the first quarter of 2019 to the first quarter of 2024, incorporating updated source data and enhanced estimation techniques.
Economists are now focusing on the potential impact of seasonal fluctuations on growth estimates, particularly as growth figures for the first quarters of 2022 and 2023 were significantly revised upwards. The latest GDP data for the first quarter of 2024 will be released alongside the third estimate for the second quarter on Thursday morning.
