United States Merchandise Exports (ann. var. %)

The economy expanded 2.7% quarter on quarter in Q4 according to revised data. However, an inventory buildup boosted the reading, and underlying momentum was less strong; private consumption growth eased, the contraction in fixed investment accelerated, and exports fell. The economy appears to be performing resiliently so far in 2023 despite tighter financial conditions. In January, payroll gains and retail sales growth smashed market expectations—although both readings could have been partly flattered by seasonal adjustment effects. Furthermore, the composite PMI returned to expansionary territory in February, pointing to improving private-sector operating conditions in the month. That said, the property sector continues to suffer from higher interest rates; housing starts were down month on month and year on year in January, boding poorly for residential investment in Q1.