Economic Update: Fourth Quarter 2022 GDP Growth, Inflation, Unemployment, Interest Rates, and Consumer Spending

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As we move into Q2 2023, let’s reflect on the US economic performance in Q4 2022. We’ll examine GDP growth, inflation, unemployment, interest rates, and consumer spending.

Gross Domestic Product (GDP) Growth:

The US economy experienced moderate growth in Q4 2022. Real GDP increased at an annual rate of 2.6%, slightly lower than the previous quarter’s 3.2%. The growth was mainly driven by increases in inventory investment and consumer spending. However, there was a decrease in housing investment. Profits decreased by 2.0% in Q4, indicating some challenges in the business sector.


Inflation remains a concern, with the Consumer Price Index for All Urban Consumers (CPI-U) increasing by 0.4% in February, following a 0.5% increase in January. Over the last 12 months, the all-items index increased by 6.0%. The Producer Price Index for Final Demand seasonally adjusted, decreased by 0.1% in February. The decline was led by prices for final-demand goods, which fell 0.2%.

Unemployment Rate:

The national unemployment rate increased slightly to 3.6%, which is 0.2% lower than in February 2022. Nonfarm payroll employment increased in 6 states and was unchanged in 44 states and the District of Columbia in February 2023. Over the year, nonfarm payroll employment increased in 46 states and was unchanged in 4 states and the District.

Interest Rates:

To support the goal of achieving maximum employment and a 2% inflation rate over the longer run, the Federal Reserve raised the target range for the federal funds rate to 4-3/4 to 5%. They will continue to monitor incoming information and adjust monetary policy as necessary.

Consumer Spending:

An increase in compensation, mainly from wages and salaries, led to an increase in current-dollar personal income in February. The $27.9 billion increase in current-dollar PCE in February reflected an increase of $25.8 billion in spending for services and an increase of $2.0 billion in spending for goods.


Overall, the economy is growing, but there are some concerns about inflation with the FED signaling a probable continuation in raising rates, and challenges in the business sector. It is worth monitoring trends in consumer spending, business investment, and profits to get a clearer picture of the economic sentiment and cycle.

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