US labor market resilience and rising profits

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As estimated in the fourth quarter, the US economy grew faster than earlier, boosted by solid customer spending and company investment in nonresidential facilities like factories and healthcare facilities.
As estimated in the fourth quarter, the US economy grew faster than earlier, boosted by solid customer spending and company investment in nonresidential facilities like factories and healthcare facilities.

As estimated in the fourth quarter, the US economy grew faster than earlier, boosted by solid customer spending and company investment in nonresidential facilities like factories and healthcare facilities.

The latest report from the Commerce Department indicates a robust performance in the labor market, with solid profit growth observed last quarter, particularly among nonfinancial corporations. 

This increase in profits, coupled with a rise in worker productivity, may incentivize companies to retain their employees.

Consumer Spending Driving Economic Stability

Despite concerns of a recession following significant interest rate hikes by the Federal Reserve, the economy remains buoyant, largely due to the resilience of the labor market. Consumer spending, which has shifted towards services, continues to be a crucial factor in sustaining the recovery.

GDP Growth Exceeds Expectations

The Bureau of Economic Analysis revised the fourth-quarter GDP growth rate to 3.4%, up from the previously reported 3.2%. This upward revision reflects improvements in consumer spending, business investment, and state and local government spending, outweighing declines in inventory accumulation and exports.

Also read: The pioneer of women’s suffrage: Louisa Ann Swain

Outperforming Global Peers

The US economy is growing above the non-inflationary rate of 1.8% identified by central bank officials. Moreover, it continues to outpace its global counterparts, with robust growth rates recorded in recent quarters.

Continued Growth Momentum

Following a growth rate of 4.9% in the July-September quarter and an expansion of 2.5% in 2023, the economy is showing signs of sustained momentum. Growth estimates for the first quarter are converging around a 2.0% pace, indicating a steady trajectory.

Consumer Spending Boosts GDP

Consumer spending, a key driver of US economic activity, increased at a 3.3% rate, contributing significantly to GDP growth. The upward revision in services spending underscores the resilience of consumer demand and its pivotal role in driving economic stability.

Gary Monroe

Gary Monroe is a seasoned contributor to the Los Angeles Business Magazine, where he offers insightful analysis on local business trends and economic developments. With a focus on Los Angeles' dynamic commercial landscape, Gary's articles provide valuable perspectives for entrepreneurs and business professionals in the city.

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