CARY, NC, February 12, 2024-

Macroeconomic Overview: The U.S. economy defied expectations of a recession in 2023. Instead, growth proved not only resilient but robust, especially in the second half of the year. The latest estimates indicate real U.S. GDP expanded at a +4.8% rate in the third quarter and a +3.3% rate in the fourth quarter.  In annual data, the U.S. economy is estimated to have grown +2.3% in 2023, representing an acceleration from the +1.9% rate posted in 2022.

The reason for widespread expectations of a recession was the sharp rise in interest rates that began in March 2022.  From levels near zero, the Federal Reserve lifted their rates to the current effective values between 5.25% and 5.50%. Other recent recessions were preceded by smaller increases (e.g., rates increased four percentage points ahead of the financial crisis and rates increased only a point and a half ahead of the dot-com crash).

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