Feb 28, 2024 - Economy

Growth powered ahead in Q4, giving 2024 momentum

Illustration of an arrow line filled with a money pattern going upward on a graph.

Illustration: Megan Robinson/Axios

The national economy finished 2023 on a strong footing, the Commerce Department confirmed today. And the rapid growth looks set to continue well into 2024.

By the numbers: The second estimate of fourth-quarter GDP shows the economy expanded at a 3.2% annualized rate — down 0.1 percentage point from the initial reading.

  • Consumer spending and state and local government spending were even stronger than first estimated — but that was offset by weaker inventories.
  • A "nowcast" produced by the Atlanta Fed estimates that the economy is tracking at a 3.2% growth rate in the first quarter — most recently pushed up by home sales data and durable goods orders released this week.

How it works: GDPNow is a running estimate of growth based on available economic data and fluctuates as more data points are published.

Between the lines: With this quarter about two-thirds through, the only major data so far covers January. But those indicators suggest strong growth has been accompanied by stronger price pressures.

  • In a speech yesterday, Fed governor Michelle Bowman said her base case is that progress on inflation will continue despite signs of stalling progress in January.
  • Still, she warned that she remains "willing" to raise interest rates further "should the incoming data indicate that progress on inflation has stalled or reversed."
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