Gross Domestic Product (GDP) growth slowed in the fourth quarter of 2023, according to the advance estimate released Friday by the U.S. Bureau of Economic Analysis.
Real GDP, a measure of the nation’s economic growth, slowed to 3.3%, a significant decline from the previous quarter’s 4.9% growth.
Warning signs, such as persistent high inflation, continue to blunt analysts’ expectations, as Fox Business notes:
“However, there are signs that growth is finally beginning to slow in the face of tighter monetary policy.
“Job growth is moderating. The housing market, which is vulnerable to higher interest rates, is trapped in a prolonged downturn, and consumer spending has shown signs of cooling off.”
While Americans may have spent more in the fourth quarter, they did so at the expense of savings.
The BEA reports that personal saving totaled $818.9 billion in the fourth quarter, compared with $851.2 billion in the third quarter. The personal saving rate (personal saving as a percentage of disposable personal income) fell to 4.0% in the fourth quarter, compared with 4.2% in the third quarter. In December, the personal savings rate fell to 3.7%, from 4.1% in November.
In contrast, the personal savings rate was more than three times higher when former Pres. Donald Trump left office.
From February 1, 2017 to February 1, 2021, the average personal savings rate increased 86%, from 7.2% to 13.4%, according to Federal Reserve Bank of St. Louis (FRED) calculations, incorporating BLS data.
