1. GDP
• Real GDP increased at a 2.9% annual rate in Q4 2022, according to the advance estimate by the Bureau
of Economic Analysis. Economic output has slowed from Q3 2022, when real GDP grew at a 3.2% annual
• While recession fears have amplified heading into 2023, economic output has remained robust from a
historical standpoint given the Fed’s aggressive monetary tightening measures. The US has now recovered
all output lost during the pandemic, with the end of year output in 2022 registering a 2.1% annual growth
• Driving the increase in output during Q4 were increases in private inventory investment, consumption,
government spending, and nonresidential fixed investment. These increases were partly offset by declines
in residential fixed investment and exports.
• Manufacturing, specifically petroleum/coal products, chemicals, as well as mining, utilities, and
construction, led increases in private inventory investment.
• An increase in both goods and services spending contributed to the growth of consumer spending.
• Growth in intellectual property products propelled nonresidential fixed investment during Q4, while falling
single-family construction and industry commissions caused a drag on residential fixed investment.
• Mortgage applications climbed by 7% during the week ending on January 20th, 2023, following a massive
27.9% surge the week before, according to the Mortgage Bankers Association.
• Mortgage application demand fell significantly during the second half of 2022 as mortgage rates rose
steeply. After falling for much of December, mortgage applications increased to begin 2023 and have
increased sharply throughout January.
• Refinance applications roes 14.6% during the week ending January 20th, while purchase applications
rose 3.4%.
• While homebuying demand remains relatively weak compared to early-cycle levels, cooling prices
and borrowing costs could draw in many households who remained sidelined in recent months due to
affordability constraints.

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