ICYMI: Ten Charts That Explain the U.S. Economy in 2023—Chart 1: Growth Was Stronger Than Expected a Year Ago

The U.S. economy defied expectations this year. Many forecasters predicted a recession, some even asserting a "100%" probability of a recession. President Biden never believed that was necessary—and he was right.

Instead of a recession, inflation is down to 2% over the last six months, unemployment has stayed below 4% for 22 months in a row, and wages, wealth, and income are all higher now than they were before the pandemic began. While there is more work to do—from lowering prescription drug and energy costs to cracking down on price gouging by banning hidden junk fees and calling on corporations to pass savings on to consumers—this year has brought remarkable progress.

The Council of Economic Advisers is highlighting ten charts that capture the most important economic developments of the past year. They depict an economy growing from the middle out and bottom up—powered by Bidenomics.

Chart 1:

Growth was stronger than expected a year ago.

Defying pessimistic forecasts, US economic growth has progressed at a significant pace over the course of 2023. Last December, the private consensus for real economic growth as measured by the Blue Chip Economic Forecast was negative 0.1% for the year. The latest Blue Chip projection for 2023 growth, incorporating all available data to date, is positive 2.6%, driven by strength in consumer spending, a revival in manufacturing structures investment and increased state and local government purchases. The level of US real GDP in 2023 even exceeded some pre-pandemic forecasts, including that of the Congressional Budget Office and the International Monetary Fund. Sound household balance sheets and a strong labor market are the primary drivers of US consumer expenditures, which continue to grow at a pace close to the average among prior expansions.

Read the full blog here.