New GDP Report Is Surprisingly Strong

The nation's economy grew at an unexpectedly brisk 3.3% annual pace from October through December as Americans showed a continued willingness to spend freely despite high interest rates and price levels that have frustrated many households, per the AP. Most analysts had predicted growth of 2% for the quarter, reports CNBC.

• Thursday's report from the Commerce Department said the gross domestic product—the economy's total output of goods and services—decelerated from its sizzling 4.9% growth rate the previous quarter. But the latest figures still reflected the surprising durability of the world's largest economy, marking the sixth straight quarter in which GDP has grown at an annual pace of 2% or more.
• For the full year, the economy grew 2.5%, up from 1.9% in 2022.
• "It's been a really strong year for economic growth," James Knightley, chief international economist at ING, tells the Wall Street Journal. "The consumer was meant to roll over—and they didn't."

• There is growing optimism that the Federal Reserve is on track to deliver a rare "soft landing"—raising borrowing rates enough to cool growth, hiring, and inflation, yet not so much as to send the economy into a tailspin. Inflation touched a four-decade high in 2022 but has since edged steadily lower without the painful layoffs that most economists had thought would be necessary to slow the acceleration of prices.
• Futures in the benchmark S&P 500 ticked up higher in the wake of the report's release. The index has recently moved into record-high territory.

(More US economy stories.)