The U.S. economy maintained a significant increase in the final three months. Still, the pace seemed to have slowed down a lot in the last few weeks of the year, probably because people spent less money because interest rates went up.
The Commerce Department released a preliminary estimate of GDP growth for the fourth quarter on Thursday. The estimate showed that the economy grew at an annualized rate of 2.9% in the previous quarter. In the third quarter, economic growth was 3.2%.
In the previous two months, retail sales have dropped dramatically, and the manufacturing sector has followed the housing market in a recession. Even though the job market is doing well, a drop in optimism among businesses could eventually slow the rate at which they hire new people.
The growth in the year’s second half was so strong that it completely offset the 1.1% drop in activity during the first half of the year. Economic growth in 2022 was 2.1%, down from 5.9% the previous year. The Federal Reserve increased its policy rate by 425 basis points in 2021, taking it from near zero to a range of 4.25%-4.50%.
Having had difficulty finding workers during COVID-19, companies outside the technology industry and in interest-rate-sensitive industries like banking and housing are now hoarding personnel.
