1/26/2023: Q4 GDP Up 2.9% Annualized
Q4 2022 GDP report is out. The US economy grew at a 2.9% annual rate in Q4 2022. For the full year, the inflation-adjusted real GDP grew 2.1% in 2022 vs. 5.9% in 2021. Nominal GDP grew 9.2% in 2022 vs. 10.7% in 2021. The increase in real GDP reflected increases in private inventory investment, consumer spending, federal government spending, state and local government spending, and nonresidential fixed investment that were partly offset by decreases in residential fixed investment and exports.
2.1% is slightly below the average of the annual GDP growth rate in the past decade. In other words, 2022 was an OK year for the US economy despite the crashing asset prices. Most reports I have seen predict 2023 to be a year of mild recession. Namely, the GDP growth will be slightly negative. I don’t think at the beginning of 2022, many people were predicting crazy high inflation, stock market crashes and big tech layoffs. But here we are. Let’s see how accurate this prediction of mild recession is at the end of 2023.