Strong Q4 Growth
Plus an observation on news coverage.
Via Yahoo! News: GDP: US economy grows at 3.3% annual pace in fourth quarter, faster than expected.
The Bureau of Economic Analysis’s advance estimate of fourth quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 3.3% during the period, faster than consensus forecasts. Economists surveyed by Bloomberg estimated the US economy grew at an annualized pace of 2% during the period.
The reading came in lower than third quarter GDP, which was revised down to 4.9%. For the year, the US economy grew at an annualized rate of 2.5%, up from 1.9% in 2022.
In handy chart form:
This is simply good news and, really, given the economic headwinds that the country has faced since the pandemic, somewhat surprising. I know it is fashionable to dismiss good macro-level indicators, but growth is good, even if it is not all you need to know about the economy. As has been noted before, the US has out-performed most other OECD counties in weathering the post-pandemic economic era.
Indeed, it is worth noting that there was long talk of a recession, and yet, here we are. Indeed, Investopedia noted back in December:
Last January, the Wall Street Journal asked a panel of 70 economists to rate the chances of a recession in the next year. The average answer was 63%.1 Unless something drastic happens in the next few days, most of them got it wrong—2023 came and went with no recession in sight.
A side note on media coverage. I knew that the GDP figures were going to be released yesterday, but I had a very busy day and did not look at the news until late in the evening. I surfed to CNN and the NYT both, as I expected this to be a front-page story, but even when I looked at “US” as a specific category, I saw nothing. I finally broke down and Googled “GDP growth” and found the stories.
While the GDP figures are hardly the most important story of the day, it is odd (to me, at least) that I couldn’t find the story on the landing page of two major news outlets. While I do not expect news of Q4 growth to radically affect public opinion on the economy, it can have no effect if news consumers are unaware of it entirely. Further, I expect that if the number had been worse than expected, the stories about impending doom would have been far more prominent, as the question, “How Will This Affect Biden?” would have been ubiquitous.
Update: Meanwhile, via HuffPo: ‘Whoa!’: Trump’s Top Economic Adviser Shocks Fox News Host With Biden Economy Admission.
So there’s that. The lead-in, where the anchor makes sure to counter-balance the good news with (vague) bad news is telling and Kudlow’s response on air is a bit more muted than the write-up suggest.