The US government’s two main measures of economic activity posted strong advances at the end of last year, pointing to enduring strength.
Already a subscriber?The US government’s two main measures of economic activity posted strong advances at the end of last year, pointing to an economy that’s still expanding at a healthy clip.an upwardly revised 3.4 per cent annualised pace in the fourth quarter
Consumer spending — which accounts for two-thirds of GDP — rose at a 3.3 per cent rate amid stronger spending on health care and financial services.The government’s other main gauge of economic activity — gross domestic income — rose 4.8 per cent, the most in two years. GDI measures income generated and costs incurred from producing goods and services, whereas GDP measures spending on such goods and services.
The group responsible for officially dating recessions at the National Bureau of Economic Research uses the average between GDP and GDI in determining turning points in the business cycle.Consumer spending — which accounts for two-thirds of GDP — rose at a 3.3 per cent rate amid stronger spending on health care and financial services, even as goods outlays were revised lower.
The report also showed that adjusted pre-tax corporate profits rose 4.1 per cent, the most since mid-2022. After-tax profits as a share of gross value added for non-financial corporations, a measure of aggregate profit margins, remained historically elevated at 15.1 per cent.
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