GDP growth in the fourth quarter was revised up to a 3.4% seasonally adjusted annual rate, showing the economy ended 2023 on stronger footing than previously realized.
The new data, adjusted for inflation, were published Thursday by the Bureau of Economic Analysis in its report for GDP for the fourth quarter and for all of last year. The data showed the economy expanded 2.5% for all of 2023.
This was the third and final revision for both the fourth quarter and all of last year, meaning that these represent the final GDP figures.
Data for the fourth quarter were revised up from the previous estimate, while the overall GDP reading for last year remained the same.
Thursday’s final report shows that the economy fared much better in 2023 than was expected. Notably, a year ago, Federal Reserve officials were projecting that GDP growth would only grow by 0.5% in 2023.
President Joe Biden has touted the country’s GDP growth as proof that his “Bidenomics” agenda is working — despite his economic approval rating being down and voters consistently expressing concerns about the state of the economy.
The Fed began raising interest rates in March 2022 as inflation rose. At its peak, price growth crested at about a 9% annual pace.
Since that zenith, inflation has fallen to a 3.2% rate, according to the latest consumer price index numbers for January. That is still above the Fed’s preferred 2% level, although it shows the Fed’s two-year quest to tamp down inflation by raising interest rates has borne results.
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The labor market has also remained resilient despite the interest rate revisions.
The economy beat expectations again in February and added another 275,000 jobs, the Bureau of Labor Statistics reported last week. The unemployment rate is at 3.9%, remaining at a low level by historical standards.