US economic growth last quarter is revised up to a 2% annual rate
Jun 29, 2023, 7:00 PM
WASHINGTON (AP) — The U.S. economy grew at a 2% annual pace from January through March as consumers spent at the fastest pace in nearly two years, the government said Thursday in a sharp upgrade from its previous estimate.
The government had previously estimated that the economy expanded at a 1.3% annual rate last quarter.
The Commerce Department’s third and final report on January-March economic growth pointed to surprising resilience but still marked a deceleration from the 3.2% growth from July through September. The economy has been slowed by the Federal Reserve’s aggressive drive to tame inflation through a series of interest rate hikes beginning early last year.
Yet Thursday’s report on the nation’s gross domestic product — the total output of goods and services — showed why the economy has so far managed to defy expectations of a coming recession: Consumers continue to spend even in the face of ever-rising borrowing costs. Their spending, which fuels about 70% of the economy, rose at a 4.2% annual rate in the January-March quarter, the most since April-June 2021.
The economy grew even though a cutback in business inventories shaved 2.1 percentage points off last quarter’s growth rate.