US ECONOMY ON FIRMER FOOTING HEADING INTO FIRST QUARTER
The U.S. economic growth in the fourth quarter saw a slight downward revision, but the overall composition of growth was much stronger than initially estimated. This suggests a positive outlook for the near term, despite a weak start to the year due to freezing temperatures.
The Commerce Department's revision mainly reflected a downgrade to inventory investment. However, there were upgrades to other key components such as consumer spending, state and local government investment, as well as residential and business outlays. Despite concerns of a recession following aggressive interest rate hikes by the Federal Reserve to combat inflation, the economy has remained resilient. This resilience can be attributed to a tight labor market, which has kept wages elevated and supported consumer spending.
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