Economy grew 2.5% in 2023, holding strong despite high interest rates

The economy grew 2.5% in 2023, defying fears of a recession and outperforming expectations despite a historic campaign by the Federal Reserve to limit the inflation that wracked the country for much of the year.

The new data, adjusted for inflation, were published Thursday by the Bureau of Economic Analysis in its report for gross domestic product for the fourth quarter. The report showed GDP growing at a 3.3% annual rate to end the year, more than the 2% level that economists had expected. That number is a preliminary estimate and will be revised in the coming months.

Notably, just last March, Fed officials were projecting that GDP growth would only grow by 0.5% this year — showing just how much the economy outperformed expectations. At 2.5%, pandemic period aside, GDP growth was the strongest since 2018.

Taken as a whole, the latest report shows
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