US economic growth last quarter is revised up to a 2% annual rate
Jun 29, 2023, 5:38 AM
Unsold 2023 Gladiator pickup trucks sit in a long row at a Jeep dealership Sunday, June 18, 2023, in Englewood, Colo. On Thursday, the Commerce Department issues its third and final estimate of how the U.S. economy performed in the first quarter of 2023. (AP Photo/David Zalubowski)
Credit: ASSOCIATED PRESS
(AP Photo/David Zalubowski)
WASHINGTON (AP) — The U.S. economy grew at a 2% annual pace from January through March as consumers spent at the fastest pace in nearly two years, the government said Thursday in a sharp upgrade from its previous estimate.
The government had previously estimated that the economy expanded at a 1.3% annual rate last quarter.
The Commerce Department’s third and final report on January-March economic growth pointed to surprising resilience but still marked a deceleration from the 3.2% growth from July through September. The economy has been slowed by the Federal Reserve’s aggressive drive to tame inflation through a series of interest rate hikes beginning early last year.
Yet Thursday’s report on the nation’s gross domestic product — the total output of goods and services — showed why the economy has so far managed to defy expectations of a coming recession: Consumers continue to spend even in the face of ever-rising borrowing costs. Their spending, which fuels about 70% of the economy, rose at a 4.2% annual rate in the January-March quarter, the most since April-June 2021.
The economy grew even though a cutback in business inventories shaved 2.1 percentage points off last quarter’s growth rate.
