The US economy maintained its resilience from October to December, the government said. But consumer spending was down.
, growing at a 2.6 per cent annual pace, the government said Thursday in a slight downgrade from its previous estimate. But consumer spending, which drives most of the economy’s growth, was revised sharply down.
The rise in the gross domestic product — the economy’s total output of goods and services — for the October-December quarter was down from the 3.2 per cent growth rate from July through September. For all of 2022, the US economy expanded 2.1 per cent, down significantly from a robust 5.9 per cent in 2021.Consumer spending rose at a 1 per cent annual rate last quarter, revised down from a 1.4 per cent increase in the government’s previous estimate.
The resulting surge in borrowing costs has walloped the housing industry and made it more expensive for consumers and businesses to spend and invest in major purchases. As a consequence, the economy is widely expected to slide into a recession later this year. Yet as higher loan costs spread through the economy, analysts are generally sceptical that the United States can avoid a downturn. The main point of debate is whether a recession will prove mild, with only minor damage to hiring and growth, or severe, with waves of layoffs.