The resilience of the U.S. economy is striking.
GDP Growth in 4Q 2023
GDP growth in 4Q 2023 was 3.3% quarter-on-quarter at a seasonally adjusted annualized rate (SAAR), following a very robust 4.9% growth in 3Q 2023. This means the economy grew at a rate of 4.1% for the second half of the year, compared to 2.2% SAAR in the first half 2023.
Historical Perspective
Increasing GDP growth by half in just half a year is quite impressive. By historical standards, this growth rate is very strong, as the quarterly average growth rate from 2010 to 2019 was 2.4%, and from 2017 to 2019, it was approximately 2.8% SAAR.
Drivers of Exceptional Performance
What is driving this exceptional performance in the second half of the year?
In terms of the breakdown of GDP growth - 3.3% in Q4 2023 and an average of 4.1% per quarter in the second half of 2023:
Household consumption contributed positively with 1.9 percentage points (p.p.) in Q4 2023 and 2 p.p. on average in the second half of 2023, compared to an average of 1.6 p.p. from 2010 to 2019 and 1.73 p.p. from 2017 to 2019.
Investment accounted for 0.38 p.p. in 4Q 2023 and 1.1 p.p. in the second half of 2023, which compares to an average contribution of 1 p.p. from 2010 to 2019 and approximately 0.65 p.p. from 2017 to 2019.
Net exports made a positive contribution of 0.43 p.p. in 4Q 2023, thanks to a higher contribution of 0.68 p.p. from exports of goods and services, while import growth subtracted 0.25 p.p. In the second half of 2023, the quarterly average positive contribution was 0.23 p.p. compared to a negative contribution of 0.15 p.p. from 2010 to 2019 and nearly zero change from 2017 to 2019.
Conclusion
In conclusion, the positive growth dynamics are remarkable, affecting all major components of GDP, even in the segment that has historically been considered "weak" - net exports.