We're not in a recession, folks. We're just in a booming economy, because we have a Democratic president, and a hateful, garbage media.
The U.S. economy finished 2022 in solid shape even as questions persist over whether growth will turn negative in the year ahead.
Fourth-quarter gross domestic product, the sum of all goods and services produced for the October-to-December period, rose at a 2.9% annualized pace, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had expected a reading of 2.8%.
The growth rate was slightly slower than the 3.2% pace in the third quarter.
Stocks turned mixed following the report while Treasury yields were mostly higher.
Consumer spending, which accounts for about 68% of GDP, increased 2.1% for the period, down slightly from 2.3% in the previous period but still positive.
Inflation readings moved considerably lower to end the year after hitting 41-year highs in the summer. The personal consumption expenditures price index increased 3.2%, in line with expectations but down sharply from 4.8% in the third quarter. Excluding food and energy, the chain-weighted index rose 3.9%, down from 4.7%.
While the inflation numbers indicated price increases are receding, they remain well above the Federal Reserve’s 2% target.
Along with the boost from consumers, increases in private inventory investment, government spending and nonresidential fixed investment helped lift the GDP number.
A 26.7% plunge in residential fixed investment, reflecting a sharp slide in housing, served as a drag on the growth number, as did a 1.3% decline in exports. The housing drop subtracted about 1.3 percentage points from the headline GDP number.
Federal government spending rose 6.2%, due largely to an 11.2% surge on nondefense outlays, while state and local expenditures were up 2.3%. Government spending in total added 0.64 percentage points to GDP.
Inventory increases also played a significant role, adding nearly 1.5 percentage points.
“The mix of growth was discouraging, and the monthly data suggest the economy lost momentum as the fourth quarter went on,” wrote Andrew Hunter, senior U.S. economist for Capital Economics. “We still expect the lagged impact of the surge in interest rates to push the economy into a mild recession in the first half of this year.”
If we have another situation in 2023 like we did in the first half of last year with negative GDP turning positive the second half, we're going to still be good. Yes, interest rates are going to slow the GDP. The Fed is still the Fed, and it will raise rates until inflation is smashed under 2%. That's going to take another 6-12 months.
We'll see how much pain the labor market goes through. I want to believe that the economy won't slide into a real hardcore recession, but with the House GOP ready to completely collapse us into a recession over the debt ceiling, all bets are off.