U.S. GDP rises by 2.9% in Q4, beats expectations

Yahoo Finance Live anchors break down U.S. GDP data.

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BRAD SMITH: But we have to begin today on the latest economic data, guys. The US GDP came in at 2.9% in the fourth quarter-- and taking a look at a much more longer-ranging kind of chart here of some of the ebbs and flows that have taken place in GDP.

This comes as we do know that economists who have been looking for or just monitoring the possibility of a recession this year. Closing out 2022 and what we did see at the tail end of last year for the final two quarters, that could look vastly different than what we see here in the first two quarters of this year as well given what they're signaling too.

JULIE HYMAN: Yeah, but I think what's interesting about the economic data that we're getting today-- and we're getting both GDP and jobless claims-- is that it points to not as protracted, not as sharp, not yet a slowdown.

Now to your point, will we have a slowdown to come? Yes, probably, and the preponderance of economists are still expecting a recession later this year. Nonetheless, a lot of the numbers that we've been getting in and a lot of the commentary that we've been getting sort of on an anecdotal basis is not as bad.

Yes, you had personal consumption in this report come in with an increase of only 2.1%. That's worse than estimated. But we keep hearing a lot of different CEOs-- and it's being seen in some of these reports. On the consumer side, things actually seem to be holding up OK.

BRIAN SOZZI: Yeah, I'm surprised to see the market reaction to this report. I thought the market would want to see something a little bit weaker instead of this stronger report, which would suggest maybe the Fed has to keep going a little bit further on the interest-rate cuts. But maybe the market is just taking its clue on better profit margins from corporate America because all of these layoff announcements, which have now officially spread beyond big tech.

BRAD SMITH: And one other matter that the markets are factoring in this morning, jobless claims. They came in at 186,000. This is the lowest level since April of 2022.

And this used to be the figure that we were tracking on a week in, week out basis because it was more real time than the monthly readings that we were getting in terms of the employment situation and really continued to give us a little bit of a mindset of how corporations or large and small enterprises were really looking across the employment situation and figuring out how they could hold onto workers at a time early in the pandemic where we saw such swaths of layoffs, furloughs.

And so now for us to be in a different situation-- even there, there still are layoffs being reported by some large tech companies. It still comes with this caveat that you do have at least the jobless claims ticking lower here as well.

JULIE HYMAN: So here's a question I have, and I should know this. When you get laid off, if you are collecting severance, can you file for unemployment insurance while you're still getting severance, or do you have to wait until your severance runs out?

BRAD SMITH: I believe based on asking--

BRIAN SOZZI: [INAUDIBLE]

BRAD SMITH: --people who have been laid off earlier this year or mid last year that you have to wait.

JULIE HYMAN: So then that means that there's going to be a delayed effect from all of these layoffs that we're hearing about now because those folks are getting severance. So at some point we're going to see the effects of that.

BRIAN SOZZI: And that comes at a time-- I just want to toss this red flag onto the field too-- the personal savings rate only 2.9%. You really get the sense that consumers, of course, were hit over the head with inflation last year, and you have to wonder, what is their capacity to spend this year? That is-- that's a really low savings rate given the rise in personal income.

JULIE HYMAN: Yeah. It seems like there's a lot of optimism around their capacity to spend, though. So we'll see how that plays out given the hard data.