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In the first quarter of this year, the US economy grew much faster than previously thought. According to new figures from the US Department of Commerce, the economy grew by 2%. Early estimates showed growth of 1.3%.
PA
June 29, 2023
This is a growth figure on a so-called annualized basis. In addition, quarter-on-quarter growth is artificially stretched to a figure comparable to annual growth. According to the method of measurement used in the Netherlands, the gross domestic product would have increased by 0.5% compared to the previous quarter.
The stronger growth was mainly driven by stronger-than-expected consumer spending in the world’s largest economy. Consumer spending is the main driver of the US economy. Exports also turned out to be stronger than expected.
In the fourth quarter of 2022, the US economy grew by 2.6%. The US economy is facing headwinds due to interest rate hikes by the Federal Reserve to combat high inflation. The Fed suspended rate hikes this month, but hinted at two more rate hikes later this year. Fed Chairman Jerome Powell said there is still a long way to go in the fight against inflation.
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