New data from the United States Department of Commerce showed that the country’s economy expanded at a 3.3% annualized pace in the final quarter of 2023.
The economy continues to expand at a rate faster than what economists expected, another sign that pressures may soon be easing.
From September to December, the economy grew at a slower pace than the previous period, which grew 4.9%.
Still, the momentum came as economists predicted slower spending amidst high-interest rates put in place to battle inflation.
In total, consumer spending rose at a 2.8% annual rate, slightly less than the previous quarter’s 3.1%, data showed.
As for other notable numbers in the fourth quarter, the department shared that housing activity slowed dramatically to a 1.1% pace in the fourth quarter, compared to 6.7% in the third quarter.
Nonetheless, with inflation cooling and the nation’s job report remaining strong, the Federal Reserve could soon dial back key interest rates.
Fed governor Christopher Waller shared earlier this month that the bank is more confident than ever that “inflation is on a path” to its 2% target.
“The data we have received the last few months is allowing the [Fed] to consider cutting the policy rate in 2024,” Waller said.
Still, the central bank would like to see consistency before it makes a decision.
“However, concerns about the sustainability of these data trends require changes in the path of policy to be carefully calibrated and not rushed,” Waller said.