US economy performed better than expected in final months of last year

Commerce Department in the United States said on Thursday (January 26) that the economy grew slower in 2022 amid fears of recession. At the fag end of the year, the economy performed slightly better than expected amid looming recession fears, higher borrowing costs and the rising cost of living.The US Commerce Department revealed that the economy grew at an annual rate of 2.9 per cent in the last three months of 2022, down from 3.2 per cent in the previous quarter.

In a statement, the department said that the "increase in real GDP in 2022 primarily reflected increases in consumer spending, exports" and certain forms of investment.

The economic activity in the country was moderating as the central bank increased the benchmark lending rate seven times last year. The hikes were aimed at cooling demand and reining in costs as inflation surged.

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In 2022, declines in manufacturing and retail sales led to a slump in the property sector. The year remained a healing period for the economy, which has faced the wrath of the pandemic and the Russia-Ukraine war.

According to Commerce Department data, the US economy expanded 2.1 per cent for all of 2022, down from the figure in 2021.

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As quoted by CNN, John Leer, chief economist of Morning Consult, said, "A shockingly resilient consumer mostly fueled the robust economic growth during the last quarter of 2022."

He said, "Consumers are increasingly struggling to navigate the ongoing effects from the spike in prices last year by drawing on credit and savings."

"With consumer demand likely to continue its downward trajectory, business investment is also likely to slow in the coming quarters, increasing the probability of a recession this year," he added.

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