US economy slowed down despite being at 2.9% rate last quarter

 

The Commerce Department reported on Thursday that the U.S. economy grew at an annual rate of 2.9% in the last quarter of 2022, despite concerns of high interest rates and a potential recession. This growth rate is a slight decrease from the 3.2% rate seen in the previous quarter. Experts predict that the economy will continue to slow in the current quarter and may enter a recession by the middle of 2023. The housing market, particularly affected by rising loan rates, has already seen a decline in sales for the past 11 months. Additionally, consumer spending, a major contributor to the economy, is expected to decrease in the coming months along with the job market. These developments are a result of the Federal Reserve's actions to raise interest rates in order to curb inflation and slow economic growth. Despite this, the job market has remained strong, with employers adding 4.5 million jobs in 2022 and an unemployment rate of 3.5%, matching a 53-year low. However, as interest rates continue to rise, it is expected that borrowing and spending will become more expensive, leading to a decrease in consumer spending and hiring. The Fed has been working to lower the inflation rate, which reached a high of 9.1% in June 2022, but has since decreased to 6.5% in December. It still remains above the Fed's target of 2% annual inflation.