Friday, June 14, 2024

US economy grew at 3.3% rate in fourth quarter


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The US economic system grew at a 3.3 per cent annualised fee throughout the closing quarter of final yr, capping off a robust 2023 that defied recession fears.

The fourth-quarter development fee was slower than the 4.9 per cent of the earlier three months, however considerably greater than economists’ estimates. The three.1 per cent determine for annual development in gross home product additionally beat expectations.

US shares and bond markets rallied on the info, as buyers centered on figures displaying that core PCE inflation remained on the Federal Reserve’s 2 per cent objective within the fourth quarter.

The figures add to proof that the US economic system has proven exceptional resilience within the face of the Fed’s prolonged marketing campaign of excessive rates of interest, paving the best way for doable fee cuts within the coming months.

It additionally suggests the central financial institution could also be heading in the right direction to tug off a so-called mushy touchdown, through which inflation is tamed with out triggering a recession.

“This GDP studying cements America’s place because the dominant driver of worldwide development,” mentioned Eswar Prasad, an economics professor at Cornell College.

He added that the US’s “sudden standout efficiency is the financial story of 2023 and a optimistic omen for what’s in any other case shaping up as a dark yr forward for world development”.

Following the info launch, US Treasuries prolonged the session’s rally, with the yield on the policy-sensitive two-year notice down 0.04 share factors to 4.34 per cent.

Wall Avenue’s S&P 500 was up 0.4 per cent shortly after Thursday’s opening bell, giving the benchmark index an opportunity at notching its fifth document excessive shut in a row. The tech-heavy Nasdaq Composite gained 0.5 per cent.

Further reporting by Stephanie Stacey and George Steer in London


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