The United States ended 2022 growing, as Americans continued to consume despite reduced purchasing power from rising interest rates and inflation, and the question now is whether or not the country will experience a recession in 2023.
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Gross domestic product (GDP) growth was 2.1% for the whole of 2022, the Commerce Department said Thursday.
This is a slower pace compared to 2021, a vintage that had experienced the strongest growth since 1984: 5.9%. The previous year had seen the biggest decline in GDP since 1946 (-3.5%) and two months of recession due to COVID-19.
US President Joe Biden was to comment on these figures at 2:45 p.m. during a speech from Springfield (Virginia), in the large suburbs of Washington.
“(Joe Biden’s) first two years of economic growth are the strongest first two years of any president since President (Bill) Clinton,” Shalanda Young, director of the budget office, said in a tweet. at the White House (OMB).
In the fourth quarter alone, growth was 2.9% at an annualized rate, a measure favored by the United States, which compares GDP to that of the previous quarter and then projects the evolution over the entire year at this rate. It is 0.7% comparing the quarter to the previous one, as do other advanced economies.
GDP is “stronger than expected,” said Rubeela Farooqi, chief economist for HFE.
However, “most of the progress happened early in the quarter and the core of the economy was weak”, and “repeated performance in early 2023 is unlikely”, commented Oren Klachkin, economist for Oxford Economics.
The year 2022 had however started badly, with two quarters of decline in GDP (-1.6% in the first quarter, then -0.6% in the second), before the return to growth in the third quarter (+3.2 %).
Consumption, the engine of the American economy, remained solid at the end of 2022 despite the sticks that the American central bank (Fed) put in its wheels, thus hoping to slow down inflation that is far too high.
While Americans largely rely on credit for their purchases, the institution raises its key rate, pushing commercial banks to raise interest rates.
This erodes the purchasing power of consumers, which was already suffering from inflation.
And for 2023, growth or recession?
“For the moment, the economic indicators point rather to a recession, which would have started at the turn of the year, December-January”, told AFP Gregory Daco, chief economist for EY Parthenon.
But, even if the American economy continues to grow in 2023, the latter could be so weak “that you will have to squint to say if it is a recession or not”, around 1% for the ‘year.
Only one organization in the United States has the authority to determine periods of recession: the National Bureau of Economic Research (NBER). But its announcements are published with several months of delay.
And another threat is now added: the debt ceiling, reached last week. Without an agreement in Congress, the United States could eventually find itself in a situation of default.
The Republican majority in the House of Representatives wants to force the Democrats to reverse certain expenditures voted before its installation.
A default “would be an unprecedented economic disaster,” said Democrat elected Brendan Boyle, a member of the House Budget Committee, in a statement.
“With the U.S. economy enjoying steady growth, declining inflation, and a booming job market, the last thing we need is for reckless Republican tightrope politics to destroy it all,” he said. he.