The US economy maintained a strong pace of growth in the fourth quarter as consumers boosted spending on goods.
The economy grew at a 3.2% pace in the third quarter. Economists polled by Reuters had forecast GDP rising at a 2.6% rate. US retail sales have weakened sharply over the last two months and manufacturing looks to have joined the housing market in recession. While the labour market remains strong, business sentiment continues to sour, which could eventually hurt hiring.
Consumer spending, which accounts for more than two-thirds of US economic activity, was the main driver of growth, mostly reflecting a surge in goods spending at the start of the quarter. Despite the clear signs of a weak handover to 2023, some economists are cautiously optimistic that the economy will skirt an outright recession, but rather suffer a rolling downturn, where sectors decline in turn rather than all at once.