A closely-watched estimate of US gross domestic product (GDP) was revised down for the final three months of last year, according to Commerce Department data released on Wednesday, albeit it is still consistent with positive economic growth. GDP growth in the world’s largest economy was lowered to an annual rate of 3.2 per cent in the last quarter of 2023, down from last month’s estimate of 3.3 per cent.
The US economy has proven wrong the majority of economists who had warned of a recession as the US central bank aggressively raised interest rates to bring soaring inflation under control. The economy has been supported by a tight labour market that is keeping wages elevated and thus underpinning consumer spending.
Meanwhile, economic sentiment in the eurozone unexpectedly reached a three-month low in February, signalling that the currency bloc is still on the brink of a recession, a monthly survey showed on Wednesday. The European Commission’s economic sentiment indicator in the countries that share the euro currency fell by 0.7 points in February to 95.4 and by 0.4 points to 95.4 in the wider European Union. “The eurozone economy remains in rough waters,” Salomon Fiedler, economist at Berenberg Bank said, “today’s economic sentiment survey suggests that near-term risks are tilted to the downside”.
Finally in Japan, industrial production sank at the fastest rate since May 2020, when the entire world was in the grips of the COVID-19 pandemic, government data for the month of January showed on Thursday, as a motor vehicle production downturn added to concerns about the vulnerability of the world’s fourth-largest economy.
The ministry of economy, trade and industry (METI) said that industrial output slumped a seasonally adjusted 7.5 per cent in January, exceeding forecasts for a fall of 6.7 per cent after the 1.4 per cent increase seen in December.
On a yearly basis, industrial production fell by 1.5 per cent after falling by 0.7 per cent in the previous month. Industrial production is expected to rise by 4.8 per cent in February and by two per cent in March, according to METI’s forecast.
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