Thanks to robust consumer spending and private investment, the U.S. economy ended 2022 on a positive note. Real GDP increased at an annual rate of 2.9 percent in the last three month of the year despite the Fed's aggressive action to slow the economy and tame inflation. Looking at the full year, real GDP grew 2.1 percent in 2022, down from 5.9 percent in 2021, when the economy had bounced back strongly from its Covid slump.
According to the first preliminary estimate released by the U.S. Bureau of Economic Analysis (BEA) on Thursday, real GDP, measured in chained 2012 dollars, increased 2.1 percent to $20.02 trillion last year, while current-dollar GDP increased 9.2 percent to a level of $25.46 trillion mostly due to high inflation.
Personal consumption expenditure, by far the largest component of the GDP, increased by 2.8 percent compared to the previous year, as an increase in consumer spending on services, particularly international travel, was large enough to offset a slight drop in inflation-adjusted spending on goods. Gross private domestic investment saw similarly mixed results, as a steep decrease in residential fixed investment was offset by increases in private inventory investment and nonresidential fixed investment. The following chart breaks down the 2022 GDP into its four components and shows how much each component contributed to the total growth of 2.1 percent.
