US GDP Growth Slows in Q4 2022

Key Takeaways

• US Q4 2022 GDP growth slows down to 2.6%
• Private inventory investment and government spending boost GDP
• Final GDP Price Index unchanged at 3.9%

Overview

According to the Bureau of Economic Analysis, the real gross domestic product (GDP) in the United States increased at an annual rate of 2.6 percent in the fourth quarter of 2022, which is lower than the 3.2 percent growth in the previous quarter.

The revision is mainly due to downward revisions to exports and consumer spending.

The increase in real GDP is due to increases in private inventory investment, consumer spending, nonresidential fixed investment, federal government spending, and state and local government spending, which were partially offset by decreases in residential fixed investment and exports.

Imports, which are subtracted from the calculation of GDP, also decreased.

The increase in private inventory investment was led by manufacturing, mining, utilities, and construction. The increase in consumer spending was driven by an increase in services and a decrease in goods.

The increase in federal government spending was led by nondefense spending, and the increase in state and local government spending was due to an increase in the compensation of state and local government employees.