The US economy grew more briskly than expected in the final three months of 2022, according to the first read on Q4 GDP.

The 2.9% pace marked a slight deceleration from the final read on third quarter growth, but topped the 2.6% economists expected. The range of estimates, from 73 credentialed seers, was 1.2% to 3.9%.

As a quick aside on the six-dozen estimates for today’s headline, we should all admit that this is just crowd-sourcing, not “forecasting.” If 500 people can collectively tell you how many jelly beans there are in a jar, then 73 people can surely give you a decent guess about the pace of economic growth if you arm them with some basic knowledge and a computer.

Ostensibly, the better-than-expected headline growth print dispensed with the notion that the US was close to cliff-edge as 2022 wound to a close, although frankly, that’s a straw man. I’m not sure anyone harbored such notions.

As far as I’m aware, no one anticipated a recessionary print on Thursday, but a prevailing sense of macro peril does hang over the world’s largest economy like stale cigarette smoke.

Consistent with the pervasive slowdown narrative, the report was less encouraging once you looked under the hood. Most notably, personal consumption was much weaker than anticipated. The 2.1% pace disappointed consensus by a fairly large margin. The market wanted 2.9%.

I suppose that’s not too surprising considering last week’s poor read on nominal sales in December.

Friday’s personal income and spending data will provide a more granular look, but the miss spoke to the notion that the US consumer may be feeling a bit stretched, if not tapped out.

Breaking down the headline by composition, inventories were the biggest driver in Q4. That may give some observers an uncomfortable sense of déjà vu.

Fixed investment was a 1.2pp drag, the most since the pandemic lockdowns plunged the economy into a short-lived depression.

Business investment was very tepid, and final sales to private domestic purchasers decelerated sharply. Residential investment plunged, as you might imagine. The 26.7% decline was only slightly less harrowing than Q3’s drop.

Q4 marked the seventh consecutive quarter during which residential investment dragged on growth. If you round up (or down, depending on how you want to look at it), it was the third consecutive quarter that the drag came to 1% or more.

Historically, these sorts of episodes (i.e., when residential investment is a persistent albatross) are associated with recession.

On the inflation front, core PCE was in line for Q4 at 3.9%, down from 4.7% in Q3. At 3.5%, the GDP price index came in above expectations.

All in all, there was nothing in the report to dissuade the Fed from its 5% terminal rate ambitions, but at the same time, there was plenty to nitpick. The US economy may be resilient, but there are cracks below the surface, to employ a cliché that’s every bit as tired as inflation-weary consumers.

Unfortunately for those seeking clarity, I don’t think there was much to be had from the GDP figures. As a magic 8 ball might put it, “Reply hazy. Try again later.”