The U.S. economy grew at a surprisingly strong pace in the fourth quarter, fueled primarily by resilient consumer spending.

According to the first estimate released by the Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 3.3% in the fourth quarter of 2023, following a 4.9% gain in the third quarter. It marks the sixth consecutive quarter of growth.

Consumer spending, the backbone of the U.S. economy, rose at an annual rate of 2.8% in the fourth quarter. Expenditures on services increased 2.4% at an annual rate and spending on goods grew at a 3.8% annual rate, led by other nondurable goods (+5.1%) and recreational goods and vehicles (+10.9%). 

Housing continued its strong contribution to the U.S. economy last quarter. Residential fixed investment grew 1.1% in the fourth quarter, down from a 6.7% increase in the third quarter. Within residential fixed investment, single-family structure investment grew at an 11.6% annual rate, improvements rose 5.5%, and multifamily structures declined 1.0%.

For the full year, real GDP increased 2.5% in 2023, up from a 1.9% increase in 2022, and slightly better than NAHB’s forecast of 2.4%.

Read the rest of the analysis of 2023 GDP in this Eye on Housing post.