The economy continued to expand but only just at year-end. Quarterly growth was unrevised at a minimal 0.1 percent, down from the previous period's unrevised 0.2 percent and its weakest performance in 2022. Annual growth halved to 0.5 percent and total output was just 1.2 percent above its pre-crisis level at the end of 2019.

As shown in the provisional data, the quarterly gain masked a contraction in final domestic demand which subtracted 0.4 percentage points. Household spending was particularly soft, falling 1.2 percent after a 0.4 percent gain in the third quarter. However, gross fixed capital formation rose 0.3 percent, building on a 2.3 percent bounce previously and boosted by a 0.6 percent jump in business investment. That said, housing investment (minus 0.9 percent after minus 0.7 percent) declined for a third straight quarter. General government consumption was up 0.6 percent while business inventories boosted growth by 0.2 percentage points.

Consequently, the economy would have been much weaker but for the external sector which added 0.3 percentage points having subtracted fully 1.1 percentage points in the third quarter. The improvement reflected a 0.5 percent gain in exports and a 0.4 percent fall in imports.

In sum, the economy at the end of 2022 continued to struggle in the face of the war in Ukraine. High inflation is clearly hitting consumer spending and the housing market is suffering from higher borrowing costs. Strike activity will also hinder output this quarter when the economy is unlikely to do much better than just keep its head above water. That said, today's updates put the French ECDI at 27 and the ECDI-P at 38, both measures signalling a tidy degree of overall economic outperformance versus market expectations.

No revisions are expected to the provisional data.

Gross domestic product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy. Following the release of the flash estimate about four weeks earlier, the second report incorporates additional data to provide a more accurate reading. This is also revised in the final report, published in the third month after the reference quarter.

GDP is the all-inclusive measure of economic activity. Investors need to closely track the economy because it usually dictates how investments will perform. Stock market Investors like to see healthy economic growth because robust business activity translates to higher corporate profits. The GDP report contains information which not only paints an image of the overall economy, but tells investors about important trends within the big picture. These data, which follow the international classification system (SNA93), are readily comparable to other industrialized countries. GDP components such as consumer spending, business and residential investment illuminate the economy's undercurrents, which can translate to investment opportunities and guidance in managing a portfolio.

Each financial market reacts differently to GDP data because of their focus. For example, equity market participants cheer healthy economic growth because it improves the corporate profit outlook while weak growth generally means anemic earnings. Equities generally drop on disappointing growth and climb on good growth prospects.

Bond or fixed income markets are contrarians. They prefer weak growth so that there is less of a chance of higher central bank interest rates and inflation. When GDP growth is poor or negative it indicates anemic or negative economic activity. Bond prices will rise and interest rates will fall. When growth is positive and good, interest rates will be higher and bond prices lower. Currency traders prefer healthy growth and higher interest rates. Both lead to increased demand for a local currency. However, inflationary pressures put pressure on a currency regardless of growth.