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US fourth-quarter economic growth revised slightly lower

The government acknowledged Wednesday that the U.S. economy grew solidly in the fourth quarter on the back of strong consumer spending, but appeared to have slowed slightly early in the year.

The Bureau of Economic Analysis of the Department of Commerce has released its second estimate of the gross domestic product (GDP) growth rate for the fourth quarter, showing that gross domestic product (GDP) increased at an annual rate of 3.2% in the previous quarter, compared to the previously announced 3.3%. It was announced that the forecast had been slightly revised downward from the % pace.

Economists polled by Reuters expected the GDP growth rate to remain unchanged. This was a slight downward revision reflecting the downgrade of private inventory investment.

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Julio Ventura welds the screed bottom of a commercial-grade road paver at the Calder Brothers factory in Taylors, South Carolina, July 18, 2021. (Brandon Granger/Calder Brothers Corporation/Handout via Reuters/Reuters Photo)

Inflation was fairly benign last quarter, but revised slightly higher than previously reported expectations.

The economic growth rate for the July-September period was 4.9%. Growth will be 2.5% in 2023, accelerating from 1.9% in 2022 and faster than the 1.8% rate that Federal Reserve officials consider non-inflationary growth.

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However, there are signs that momentum is slowing. Retail sales, housing starts, durable goods orders, and factory production declined in January. Part of the weakness in last month’s data was due to sub-zero temperatures as well as difficulty adjusting the data for seasonal fluctuations earlier in the year. Economists do not predict a recession.

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Financial markets expect the Fed to postpone the start of interest rate cuts from May to June. Starting in March 2022, the U.S. central bank will raise interest rates by 525 basis points, to the current range of 5.25% to 5.50%.

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