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03/28/2024 |

Understanding Economic Growth In 2023: Key Q4 2023 GDP Insights

This is an image of a bar chart of the GDP percent change from preceding quarter.

Fourth Quarter GDP Highlights

In the fourth quarter of 2023, real gross domestic product (GDP) increased at an annual rate of 3.4%. This ‘third’ estimate was released by the Bureau of Economic Analysis on Thursday, March 28th, and is based on more comprehensive data than was available for last month’s estimate of 3.2%. It indicates positive trends in consumer spending, state and local government spending, and nonresidential fixed investment, offsetting a decrease in private inventory investment.

Personal Income and Savings

Personal income witnessed a notable increase of $230.2 billion in the fourth quarter, reflecting gains in compensation and income from assets. Disposable personal income rose by 3.8%, though real disposable income saw a slightly lower increase of 2.0%. Additionally, personal savings reached $815.5 billion, with the personal saving rate at 4.0%.

Industry Contributions and Gross Output

Across various sectors, private goods-producing industries increased by 7.0%, with notable contributions from manufacturing and construction. Private services-producing industries also saw growth, particularly in retail trade, healthcare, and professional services. Government spending increased by 3.1%, driven by state, local, and federal expenditures. Real gross output, reflecting industry sales and receipts, rose by 2.4%, with contributions from multiple sectors driving economic expansion.