Recent economic data from last week has indicated a strong finish to 2023, despite a modest deceleration in economic growth. The initial estimate of Q4 real GDP growth revealed a decrease to 3.3% annualized from 4.9% in Q3. Nevertheless, all components of GDP remained positive, with consumer spending playing a significant role in propelling growth. Furthermore, both new and existing home sales demonstrated improvement as mortgage rates declined.
In December, consumer spending growth surpassed expectations, while personal income growth experienced a slight deceleration. Nevertheless, spending on both goods and services remained robust and stable, resulting in a decrease in the personal savings rate to its lowest level in a year. Inflation measures, particularly the Personal Consumption Expenditure Index (PCE), evidenced consistent overall price inflation and a decline in the core inflation rate.
New home sales and pending home sales experienced growth in December, particularly in the Midwest, South, and West regions. The National Association of Realtors (NAR) expressed optimism regarding existing home sales in 2024, projecting a 13% increase following previous declines.
Jonathan Smoke, the leader of Cox Automotive’s economic and industry insights team, shared insights on market trends and their impact on the automotive industry. With 28 years of experience in translating data and trends into actionable insights, Smoke emphasized the key metrics and trends influencing the wholesale and retail auto markets.
Overall, the economic outlook remains positive despite the slight growth deceleration, with consumer spending continuing to be a driving force. As we progress into 2024, the evolution of these trends and their implications for various industries will be of great interest.
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