US economic growth was slightly weaker than previously estimated in the fourth quarter last year, according to government data released Wednesday, due mainly to a downward revision to business investment.
GDP growth in the world’s biggest economy was revised to an annual rate of 3.2 percent in the final three months of 2023, from an initial estimate of 3.3 percent released last month.
“The update primarily reflected a downward revision to private inventory investment,” said the Department of Commerce in a report.
But it added that this was partially offset by revisions upward to government and consumer spending.
Full-year growth remained at 2.5 percent, markedly above the 2022 level.
While many analysts expected that consumer spending would lose steam as households drew down on savings from the pandemic period and as borrowing costs stayed elevated, consumption has been more resilient than anticipated.
The US economy also defied predictions that it would enter a recession, strengthening optimism that it is achieving a soft landing — where inflation cools from higher interest rates without triggering a downturn.
While real GDP was revised down, “consumption was stronger in the second estimate,” said economist Rubeela Farooqi of High Frequency Economics.
“More than the fourth quarter data, the trend in growth and inflation going forward will be important,” she added in a note.
“We think growth will slow but will remain positive over coming quarters,” she said.
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