WASHINGTON - The nation's economy expanded at a 2.9% annual pace from October through December, ending 2022 with momentum despite intended higher interest rates, by the Federal Reserve, and fear of a recession. The U.S. Commerce Department released its estimates on Jan. 26 showing that the gross domestic product (GDP) slowed in the 4Q from the 3.2% annual growth rate from July through September. Many economists believe the economy will slow further here in the 1Q of 2023 and slide into a mild recession by June. The economy got a boost in 4Q from consumer spending, restocking of supplies by businesses and federal government spending. With higher mortgage rates, investment in housing plummeted at a 27% annual rate. For all of 2022, GDP expanded 2.1% after growing 5.9% in 2021.The Fed’s hikes are meant to reduce growth, cool spending and stop the worst inflation in 40 years. Last year, the Fed raised its rate seven times. It will do it again next week- though by a smaller amount. (The AP 01/26/23)
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