The U.S. economy experienced higher growth in the fourth quarter of 2023 than previously reported, with the Bureau of Economic Analysis revising Gross Domestic Product (GDP) up to an annual rate of 3.4%. Personal income also saw an increase of $230.2 billion, up $10.7 billion from the previous estimate. This update was primarily due to upward revisions in consumer spending and nonresidential fixed investments, though private inventory investments decreased.
The increase in real GDP, adjusted for inflation, was recorded at 3.2%. Factors driving this growth included consumer spending, government spending, exports, and fixed investments. This growth surpassed expectations for the fourth quarter of 2023.
In addition to personal income and savings increases, U.S. corporate profits also rose by $5.9 billion, compared to a $9 billion increase in profits seen in the third quarter of 2023. The Bureau of Economic Analysis reported increases in real gross output, private goods and services-producing industries, and government output for the whole of 2023.
Seventeen out of twenty-two industry groups contributed to the rise in real gross output across various sectors. Price indices for gross domestic purchases and personal consumption expenditures also saw increases in the fourth quarter of 2023, at 1.9% and 1.8% respectively, with the PCE index excluding food and energy seeing a 2.0% increase.