US Economy Grows at Impressive 3.3% in 2023
Real GDP’s Q4 growth estimated at 4.9% while GDP at current dollar rose 6.3 percent, or $1.61 trillion
The U.S. economy grew at a robust annual rate of 3.3 percent in the fourth quarter of 2023, according to the "advance" estimate the Bureau of Economic Analysis has released.
The real GDP’s growth in 2023 Q4 per se was 4.9 percent, according to the GDP estimate released by the BEA based on source data that are incomplete or subject to further revision by the source agency.
The strong growth is a continuation of robust industrial production increases driven by auto manufacturing rebound
The increase in real GDP reflected a rise in consumer spending, exports, state and local government spending, nonresidential fixed investment, federal government spending, private inventory investment, and residential fixed investment, the press release said. Imports also increased. The estimated value of both services and goods increased.
The leading contributors in services were food services, accommodation and health care. Nondurable goods (led by pharmaceutical products) and recreational goods and vehicles (led by computer software) majorly contributed to the increase in goods.
Goods and Services Exports Rise
In exports, both goods (led by petroleum) and services (led by financial services) increased. The increase in state and local government spending primarily was mainly caused by increases in compensation of state and local government employees and investment in structures, according to the press release.
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Meanwhile, the increase in nonresidential fixed investment reflected increases in intellectual property products, structures, and equipment. The increase in federal government spending was led by nondefense spending. The increase in inventory investment was led by wholesale trade industries.
Within residential fixed investment, the increase reflected an increase in new residential structures that was partly offset by a decrease in brokers' commissions. Within imports, the increase primarily reflected an increase in services (led by travel).
Compared to the third quarter of 2023, the deceleration in real GDP in the fourth quarter reflected slowdowns in private inventory investment, federal government spending, residential fixed investment, and consumer spending. Imports decelerated.
Current‑dollar GDP grew 4.8 percent at an annual rate, or $328.7 billion, in the fourth quarter to $27.94 trillion. In the third quarter, the GDP increase (at current dollar) was 8.3 percent, or $547.1 billion.
Personal Income Increases
Current-dollar personal income increased $224.8 billion in the fourth quarter, when compared with $196.2 billion increase in the third quarter. The increase reflected rise in compensation, personal income receipts on assets, and proprietors' income that were partly offset by a decrease in personal current transfer receipts.
Disposable personal income increased $211.7 billion, or 4.2 percent, in Q4, compared with $143.5 billion increase, or 2.9 percent, in the third quarter. Real disposable personal income increased 2.5 percent, compared with an increase of 0.3 percent.
A consistent fall in jobless rates are reflected in the increase in real GDP and performance of the economy.
The Q4 personal saving was $818.9 billion, compared with $851.2 billion in Q3. The personal saving rate, which is personal saving as a percentage of disposable personal income, was 4.0 percent in the fourth quarter, compared with 4.2 percent in the third quarter.
Growth in GDP for 2023
It’s estimated that real GDP grew 2.5 percent in 2023 (from the 2022 annual level to the 2023 annual level), compared with an increase of 1.9 percent in 2022. The increase in real GDP last year mainly echoed increases in consumer spending, nonresidential fixed investment, state and local government spending, exports, and federal government spending that were partly offset by decreases in residential fixed investment and inventory investment. Imports, meanwhile, decreased.
The increase in consumer spending reflected increases in services (led by health care) and goods (led by recreational goods and vehicles). The increase in nonresidential fixed investment reflected increases in structures and intellectual property products. The increase in state and local government spending reflected increases in gross investment in structures and in compensation of state and local government employees. The increase in exports reflected increases in both goods and services. The increase in federal government spending reflected increases in both nondefense and defense spending.
The decrease in residential fixed investment mainly reflected a decrease in new single-family construction as well as brokers' commissions. The decrease in private inventory investment primarily reflected a decrease in wholesale trade industries. Within imports, the decrease primarily reflected a decrease in goods.
Gross Domestic Purchase Rise
Current-dollar GDP increased 6.3 percent, or $1.61 trillion, in 2023 to $27.36 trillion, compared with an increase of 9.1 percent, or $2.15 trillion, in 2022.
The price index for gross domestic purchases increased 3.4 percent in 2023, compared with an increase of 6.8 percent in 2022 (table 4). The PCE price index increased 3.7 percent, compared with an increase of 6.5 percent. Excluding food and energy prices, the PCE price index increased 4.1 percent, compared with an increase of 5.2 percent.
Measured from the fourth quarter of 2022 to the fourth quarter of 2023, real GDP increased 3.1 percent during the period (table 6), compared with an increase of 0.7 percent from the fourth quarter of 2021 to the fourth quarter of 2022.
The price index for gross domestic purchases, as measured from the fourth quarter of 2022 to the fourth quarter of 2023, increased 2.4 percent, compared with an increase of 6.2 percent from the fourth quarter of 2021 to the fourth quarter of 2022. The PCE price index increased 2.7 percent, compared with an increase of 5.9 percent. Excluding food and energy, the PCE price index increased 3.2 percent, compared with 5.1 percent, according to BEA.
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