MNI BRIEF: US 4Q GDP Beats Expectations, Rising 2.9%
Robust growth figures add to hopes the U.S. can avoid a recession.
U.S. GDP growth decelerated in the fourth quarter to 2.9% but was still three-tenths higher than Wall Street expected, boosted by increases in manufacturing inventories and consumer spending on services and auto, the Bureau of Economic Analysis reported Thursday.
Personal consumption expenditures rose 2.1% in the quarter, slowing from 2.3% in the third quarter, contributing roughly 1.5pp to overall GDP. Final sales to domestic purchasers, a measure of demand, slowed to 0.8% from 1.5% in the third quarter. A rise in manufacturing inventories as supply chain bottlenecks eased contributed another 1.5pp. Housing investment fell 26.7%, about the same as a 27.1% decline in the third quarter.
PCE inflation slowed to 3.2% in the fourth quarter from 4.3% in the third quarter. Core PCE inflation was 3.9%, down from 4.7%.