New GDP Data is ‘Positive,’ Clouds Clearing, Says NAFCU Economist

WASHINGTON–Although discussion and forecasts continue to focus on a recession in the U.S. economy, economic growth remained solid at the end of 2022, according to new federal data.

Curt Long

The Commerce Department said U.S. gross domestic product, adjusted for inflation, increased at an annual rate of 2.9% in the fourth quarter of 2022, down slightly from a 3.2% growth rate in the Q3.

Consumer spending grew at a 2.1% rate, according to the Commerce Department data, which will be revised at a later date.

“The big picture view of economic growth in the fourth quarter is a positive one,” said NAFCU Chief Economist and VP-Research Curt Long. “Much of that growth was concentrated in inventory build, which is unlikely to grow at a similar pace in 2023. Nevertheless, with resilient consumer spending, low unemployment claims, and receding inflation, some of the clouds that were forming over the economy several months ago are beginning to clear.”

The healthy fourth-quarter growth capped a year in which economic output contracted in the first half, prompting talk of a recession, then rebounded, noted the New York Times in its review of the data.

“Over the year as a whole, as measured from the fourth quarter a year earlier, GDP grew 1%, down sharply from 5.7% growth in 2021,” the report added.