The U.S. economy defies expectations yet again.

From Marketplace, I'm Sabrie Benashore, in for David Brancaccio.

The U.S. economy grew at an annual rate of 3.3% in the fourth quarter of last year, according to the Commerce Department.

That blew expectations out of the water.

Diane Swank, chief economist at KPMG joins us to talk about it.

Diane, the labor market was slowing down,

lending was slowing down,

and yet we get this blockbuster number.

What do you make of that?

It is stunning and you know really it is a combination of factors we had inflation

cooling at its fastest pace and this is in the wake of the most aggressive credit

typing cycles since the 1980s outside of a war recession.

That's incredible.

It also is a sign of not only a consumer that was resilient but defiant consumers continued to spend but they

did push back on price increases and that forced companies to one the slowdown in Churn and also finally companies were investing in

training again which they neglected a bit early on in the pandemic and they

also learn to use the technology technologies they deployed to go online early in the

pandemic.

And what's so important about the productivity growth aspect of this is that is the one

way to get to justify higher incomes over time and it's

reminiscent of we haven't seen anything like it since the latter part of the 1990s

when we actually saw income inequalities narrow.

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