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US gross domestic product grew at an annualised rate of 3.3 per cent during the final quarter of last year, capping off a stronger-than-anticipated 2023 for the world’s largest economy.
While the fourth-quarter rate was slower than the 4.9 per cent expansion recorded in the preceding three month period, it still means the US economy managed to grow by 3.1 per cent between the fourth quarter of 2022 and the fourth quarter of 2023 — beating expectations for a year where the Federal Reserve’s tightening was expected to slow output.
However, consumers and the US government have carried on spending, despite higher borrowing costs.
The figure for the fourth-quarter was substantially higher than economists’ estimates. On average, they were forecasting an expansion of 2 per cent, according to a Refinitiv poll.
Despite the strong numbers, which last year often spooked investors afraid that continued growth would spark inflation, both US stock and bond markets rallied on the data — an indication Wall Street believes the economy is still headed for a “soft landing” of steady growth and lower inflation.
In financial markets, US Treasuries extended the session’s rally, with the yield on the policy-sensitive two-year note down 0.03 percentage points to 4.35 per cent.
Contracts tracking Wall Street’s benchmark S&P 500 and the tech-heavy Nasdaq 100 rose 0.4 per cent and 0.5 per cent, respectively, ahead of the New York open.
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