US GDP Growth Beats Expectations, Crypto Unenthused

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U.S. GDP growth in the fourth quarter of 2022 came in higher than expectations, although fears of recession remain.

Gross domestic product, adjusted for inflation, increased in Q4 2022 at an annual rate of 2.9%, according to the latest data from the U.S. Commerce Department’s Bureau of Economic Analysis.

While this represents a drop from 3.2% in the third quarter, it is higher than expectations of 2.6%. However, over the year as a whole, GDP grew a mere 1%, down sharply from 5.7% growth in 2021.

Market Reacts

Markets reacted favorably in anticipation of the favorable estimate, with futures contracts on the S&P 500-stock index rising 0.5%. Sensitive to changes in economic growth, the yield on the 10-year Treasury note ended up rising back above 3.5%.

News of a robust U.S. economy bolstered the U.S. dollar somewhat against a basket of other currencies representing America’s major trading partners. 

Crypto markets also rose slightly following the release of the data, although perhaps incidentally, considering the extent to which they did. A half hour after the announcement, Bitcoin was up 0.2% and Ethereum 0.24%. Total cryptocurrency market capitalization is up 3.1% in the past day to $1.09 trillion.

Source:Coin360

Great Expectations

As mentioned, solid fourth quarter figures had been widely anticipated, reinforcing the perspective that the economy has persevered despite rising inflation and interest rates. 

Although economic output had contracted in the first half of the year, stoking fears of a recession, growth then rebounded. A robust labor market and cooling inflation enabled Americans to continue spending, in spite of inflation fears. 

But while the job market remains strong, business sentiment continues to sour, which could eventually hurt hiring. Economists expect the Federal Reserve’s interest rate hikes last year to cause a mild recession this year.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.



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