U.S. Economy Surges in Growth in Fourth Quarter 2023, Outpacing Estimates and Boosting Corporate Profits

Revised: U.S. Economy Shows Stronger Growth Than Initially Reported in Fourth Quarter of 2023

In the final quarter of 2023, the U.S. economy experienced a surge in growth that surpassed previous estimates, with the Bureau of Economic Analysis revising Gross Domestic Product (GDP) up to an annual rate of 3.4%. Personal income also saw an increase of $230.2 billion, up $10.7 billion from the initial estimate. The primary driver of this update was upward revisions in consumer spending and nonresidential fixed investments, although private inventory investments decreased.

The growth in real GDP, adjusted for inflation, was recorded at 3.2%, which was higher than expected for the fourth quarter of 2023. Factors contributing to this growth included consumer spending, government spending, exports, and fixed investments.

In addition to personal income and savings increases, U.S. corporate profits also rose by $5.9 billion in the fourth quarter of 2023 compared to a $9 billion increase seen in profits during the third quarter of 2023. The Bureau of Economic Analysis reported increases in real gross output across various sectors throughout 2023, with seventeen out of twenty-two industry groups contributing to the rise in real gross output in the final quarter alone.

Price indices for gross domestic purchases and personal consumption expenditures also saw significant increases in the fourth quarter of 2023, with PCE index excluding food and energy seeing a particularly notable increase at 2%. These figures suggest that despite global economic challenges, the U.S economy remains strong and resilient heading into 2024.

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