US economy grew at end of 2022, defying recession fears
ABC NEWSJan 26, 2023
According to the latest US Bureau of Economic Analysis (BEA) figures released on Thursday, the US economy grew at an annualized rate of 2.9% in the fourth quarter of 2022, higher than growth forecasts predicted.
This follows a 3.2% growth in Q3, with initial market reactions causing the US dollar to strengthen against rival currencies. The BEA said the increase in real GDP reflected increased government and consumer spending, increased private investments, and decreased imports.
While the economy is expected to be headed for a slowdown this year, it's clear that economic growth in 2022 showed a marked improvement from the first half of the year. Despite the headwinds of inflation and increased interest rates, as well as being a difficult year for the housing sector, the economy continues to defy recession fears.
Despite the strength of the labor market, the hiked interest rates — which will be felt in full force this year — means that the US likely won't be able to avoid a recession. Just because GDP didn't decline in Q4 doesn't mean that the economy is back on track by any means.
There's a 66% chance that the US will enter a recession before 2024, according to the Metaculus prediction community.