Source: Financial Times —
How did the US economy fare in the fourth quarter of 2022?
The US economy is expected to have expanded in the fourth quarter, albeit at a slower pace than earlier in the year, as the Federal Reserve’s aggressive interest rate-raising campaign bites into growth.
The Bureau of Economic Analysis on Thursday is forecast to report that US gross domestic product grew by 2.6 per cent in the three months to December 31, according to a Bloomberg poll of economists. That would mark a shift lower from the 3.2 per cent in the third quarter.
The housing sector is likely to have contributed to that slowdown, Citi analysts Veronica Clark and Andrew Hollenhorst argue. Lower residential investment, they say, is likely to have weighed “substantially” on Q4 GDP, which is already evident in data such as housing starts and building permits. As the Fed has raised interest rates, and in turn lifted mortgage rates, the housing sector has slowed, with new home construction falling in December for the fourth consecutive month and marking the first annual drop since 2009.
Also included in the GDP release will be the personal consumption expenditures price index, which reflects changes in the price of goods and services. That data is expected to show an increase of 1.7 per cent, down from 2.3 per cent in the previous quarter. Kate Duguid
Will confidence in the European economic outlook rise?
The first economic indicators for the eurozone and the UK in 2023 are expected to show signs among companies that a downturn in Europe will be milder than previously feared.