Curtis Dubay Curtis Dubay
Chief Economist, U.S Chamber of Commerce


January 27, 2023


As expected, the economy grew sharply at the end of 2022. GDP expanded by 2.9% in the 4th quarter (from October through December).

By the numbers: We estimated the economy would grow by 2.5%, so we were right in line with the actual data.

  • Consumer spending rose 2.1%
  • Business investment rose 0.7%
  • Residential investment fell 27%
  • Inventory build-up added 1.5% to GDP growth
  • Trade added more than 0.5% to growth as imports fell (-4.6%) more than exports (-1.3%)
  • Government spending rose by 3.7%

Why it matters: Consumers still spent in the fourth quarter and drove growth. The drop in residential investment, while large, was expected because of higher interest rates. The inventory build is also good news because businesses have been plagued by supply problems. They needed to add inventory.

Be smart: It is of course good news that the economy was robust at the end of last year. But that’s in the past. Growth looks to be falling in 2023.

  • The economy is slowing because consumers can’t keep up with inflation anymore, even as inflation falls. Consumers have run out of savings and run up their credit card balances. And even though their wages are growing, they aren’t growing as fast as inflation. Inflation-adjusted spending is starting to drop, which we see in the most-recent retail data.

Looking ahead: The 2.9% growth in Q4 2022 will be the strongest quarterly growth rate until at least 2024, and most likely late 2024 or into 2025. We have mostly avoided paying a macroeconomic cost for high inflation, but the cost is finally coming due. 

About the authors

Curtis Dubay

Curtis Dubay

Curtis Dubay is Chief Economist, Economic Policy Division at the U.S. Chamber of Commerce. He heads the Chamber’s research on the U.S. and global economies.

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