Estimated growth in the U.S. economy was revised slightly lower in the third quarter of 2023.
The U.S. economy grew an annualized 4.9% in the third quarter of 2023, a slight decrease from “second” estimates of 5.2% but in line with “advanced” estimates for the quarter, according to the latest Gross Domestic Product (GDP) data from the Bureau of Economic Analysis (BEA).
BEA provides three estimates of GDP each quarter. Advance estimates reflect an early look based on the best available information, while the second and third estimates incorporate additional source data.
Updated GDP numbers for the quarter primarily reflected a “downward revision to consumer spending,” BEA stated in its news release.
Despite the weaker real GDP reading of 4.9%, the economy still grew at a solid pace compared to growth in the prior quarter. In the second quarter, real GDP — adjusted to remove the effects of inflation over time — increased by 2.1%, according to final GDP estimates.
“The increase in real GDP reflected increases in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, residential fixed investment, and nonresidential fixed investment,” BEA stated in the release.
With the American economy expanding and inflation trending lower, the coming year could present some exciting opportunities, according to Christopher Rupkey, chief economist at FWDBONDS in New York.
“There is plenty to cheer about the economy, and next year should be even better as the Federal Reserve takes the brakes off the economy now that inflation is going their way,” said Rupkey, per Reuters.
Federal Open Market Committee participants at the Federal Reserve are currently forecasting three rate cuts in 2024, as reported by The Dallas Express. While the Fed has officially put rate cuts on the table, New York Fed President John Williams told CNBC that it’s still too early to be talking about rate cuts.
“We [as monetary policy makers] aren’t really talking about rate cuts right now,” Williams said. “We’re very focused on the question in front of us, which as chair Powell said … is, have we gotten monetary policy to sufficiently restrictive stance in order to ensure the inflation comes back down to 2%? That’s the question in front of us.”