In the latest estimate released by the Commerce Department, the growth of US GDP in the first quarter of 2023 was lower than initially expected, coming in at 1.3% instead of 1.6%. This revision was primarily due to a decrease in consumer spending, particularly for automobiles. However, despite this disappointment, the revision was slightly higher than the predicted growth rate of 1.2%, according to analysts. The final estimate will be published on June 27.
In the fourth quarter of 2023, gross domestic product stood at 3.4%. Despite this disappointing growth rate, which marked its lowest level in almost two years following a period of exceeding expectations in 2023 and avoiding recession forecasts, consumption remains a key driver of growth in the US economy. American families increased spending on healthcare, financial services, and insurance during this time.
The US GDP has experienced fluctuations over the past few years due to economic challenges caused by Covid-19 and subsequent strong growth. The largest drop since 1946 was followed by the strongest growth since 1984, reflecting both challenges and resiliency in the United States economy.
Overall, this update on GDP growth highlights how important consumer spending is as a key driver of economic recovery and resilience in America.