U.S. Economy Surprises with 3.4% Growth in Fourth Quarter of 2023, Up from Previous Estimate of 3.1%

Revised: U.S. Economy Shows Stronger Growth Than Initially Reported in Fourth Quarter of 2023

The U.S. economy showed a surprise growth rate of 3.4% in the fourth quarter of 2023, according to the Bureau of Economic Analysis (BEA). This was an increase from the previously reported Gross Domestic Product (GDP) annual rate of 3.1%.

Personal income also saw a significant increase, up $230.2 billion from the previous estimate to $256.9 billion in real terms. This growth was driven by upward revisions in consumer spending and nonresidential fixed investments, while private inventory investments decreased slightly.

Real GDP, adjusted for inflation, was recorded at 3.2%, which surpassed expectations for the fourth quarter of 2023. Factors contributing to this growth included government spending, exports, and fixed investments. U.S. corporate profits also rose by $5.9 billion compared to a $9 billion increase seen in the third quarter of 2023, indicating strong business performance throughout the year.

The BEA also reported increases in real gross output across various sectors, with seventeen out of twenty-two industry groups contributing to this growth during the whole of 2023. Price indices for gross domestic purchases and personal consumption expenditures also saw increases in the fourth quarter of 2023, with PCE index excluding food and energy seeing a significant rise at 17%.

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