US fourth-quarter GDP revised upward; weekly jobless claims decline

latest data from Commerce Department's Bureau of Economic Analysis showed that US economy expanded at a faster pace than previously estimated in fourth quarter of last year. upward revision was attributed to robust consumer spending and increased business investment in non-residential structures such as factories.

Gross domestic product (GDP) grew at 3.4 per cent in last quarter of 2023, up from previously reported 3.2 per cent pace. revision reflected improvements in consumer spending, non-residential fixed investment, and state and local government spending. Economists h expected that GDP growth would remain unchanged.

US economy's expansion above non-inflationary growth rate, as recognised by Federal Reserve officials, coupled with its outperformance compared to global peers, has persisted despite interest rate hikes by central bank since March 2022 to combat inflation.

From income side, economy saw a robust growth rate of 4.8 per cent. Gross domestic income (GDI) expanded at a 1.9 per cent pace in previous quarter. While GDP and GDI ideally should align, differences arise due to variations in data sources used for estimation.

widening gap between GDI and GDP in prior quarters h raised concerns among economists regarding true strength of economy. surge in GDI, driven by higher wages, has alleviated some of se concerns.

resilient labour market has been a key driver of economic stability, maintaining elevated wage growth and fuelling consumer spending. Growth projections for first quarter are converging around a 2.0 per cent pace.

In dition to positive GDP revisions, a separate report from Labour Department indicated a decline in initial claims for state unemployment benefits. Initial claims dropped by 2,000 to a seasonally justed 210,000 for week ending March 23, slightly lower than economists' expectations.

Despite fluctuations, jobless claims have remained within a relatively narrow range since February, reflecting employers' efforts to retain ir workforce despite sporic layoffs earlier in year.

(With Reuters inputs)