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U.S. economy grew at 2.9% rate in last three months of year despite pressure of high rates and fears of recession.

The U.S. economy ended last year on a solid footing despite the pressure of high interest rates and widespread fears of a looming recession.

The Gross Domestic Product — the sum of all goods and services that make up the economy — expanded at a 2.9% annual pace from October through December of 2022, the Commerce Department said Thursday. For the year overall, GDP grew 2.1%.

Thursday's estimate showed that the economy slowed last quarter from the 3.2% annual growth rate it had posted from July through September.

Most economists think the economy will slow further in the current quarter and slide into at least a mild recession by midyear.

The housing market, which is especially vulnerable to higher loan rates, has already been badly bruised: Sales of existing homes have dropped for 11 straight months.

And consumer spending, which fuels roughly 70% of the entire economy, is likely to soften in the months ahead, along with the still-resilient job market.

"Consumer spending — the economy's main growth engine — is expected to weaken as income growth softens and households can no longer rely on excess savings to maintain their desired pace of spending," economists at Oxford Economics said in a note. More interest-rate hikes on the way

The economy's expected slowdown is a planned consequence of the Federal Reserve's aggressive series of rate hikes.

The Fed raised its benchmark rate seven times last year in a bid to reduce growth, cool spending and crush the worst inflation bout in four decades. It is set to do rate hikes again when it meets next week, though this time by a smaller amount.

Inflation remains stubbornly high even though it has been gradually easing. Year-over-year inflation was raging at a 9.1% rate in June, a 40-year high. It has since cooled — to 6.5% in December — but is still far above the Fed's 2% annual target.

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by Anonymousreply 7January 28, 2023 10:11 PM

But what about the documents at Biden's house and Hunter's laptop? -- Typical Fox "News" commentator.

by Anonymousreply 1January 26, 2023 8:52 PM

This report again reminds me that it seems tech execs want a recession. They keep blaming a slowdown in consumer spending... and then consumer spending is revealed to be holding up. I think they're using it as an excuse for their poor decisions to over-hire during the pandemic. Or maybe they're terrified that the Republicans are going to crash the worldwide economy when they refuse to raise the debt ceiling... but I doubt that laying off 5% - 10% of their workforce is going to somehow save them from the repercussions of that GOP failure.

by Anonymousreply 2January 27, 2023 4:20 AM

The New York Times has been telling me for a year that we're having a recession.

by Anonymousreply 3January 27, 2023 5:02 AM

The same group who demanded a Red wave in the last elections

by Anonymousreply 4January 27, 2023 5:19 AM

I am still blocked and censored. Im "ok" with your decision. I did remember to take autopsy off my membership option.

by Anonymousreply 5January 27, 2023 7:35 PM

My account is still blocked. Its, "ok". Not right. But it is ok.

by Anonymousreply 6January 28, 2023 6:54 PM

Agree r2 100%. Its only the tech sector that's been crowing about recession for the last two years. It's THEIR recession, the entire economy doesn't need to collapse because of their losses

by Anonymousreply 7January 28, 2023 10:11 PM
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