The US economy grew nearly 3 percent in the last quarter of 2022, despite high inflation, rising interest rates and the threat of a recession.

On Thursday, the Commerce Department released its report on economic activity from October to December. It said the GDP rose 2.9 percent, which was higher than many economists had expected.

Consumer spending, which accounts for two-thirds of US economic activity, grew 2.1 percent. That figure increased despite the Federal Reserve raising interest rates to control rising prices.

However, the hikes have cut into demand for housing, which contracted at an annual rate of 26.7 percent. Many economists predict other sectors will follow and expect a recession by the second half of the year.