Jill On Money: Will US economic growth fall off a ledge?
Two recently released economic reports paint a nuanced picture of the U.S. economy.
The government said that U.S. gross domestic product (GDP) increased at a 2.9% annualized pace in the fourth quarter of 2022, capping a year when growth was up by just 1% (as measured from the fourth quarter a year earlier), down substantially from the 5.7% blazing hot 2021, though up from the horrendous 2020 when the economy shrank by 3.4%.
The pandemic really did wallop the economy. The U.S. does not usually see big swings up or down in successive years. In fact, in the five years leading up to COVID-19, here is how the economy, as measured by GDP, performed:
Even though the economy eked out a gain last year, there are signs that trouble could be brewing.
Paul Ashworth of Capital Economics noted that “despite the apparent resilience of fourth-quarter GDP growth, the economy was on the precipice of a recession, and may already have fallen off the ledge,” mostly due to a pull-back in spending by consumers and businesses.