Expected at 2.6% and then 2.9%, US GDP growth reached 3.2% in the third quarter at an annualized rate. Household consumption and business investment were also higher than expected in this period.
US gross domestic product (GDP) growth in the third quarter was revised upward Thursday to 3.2% on an annual basis, according to the third and final estimate released by the Commerce Department. The first estimate reported growth of 2.6% and had already been revised for the first time to 2.9%. This surprised analysts, who did not expect another upward revision. GDP growth is just 0.8% compared to the previous quarter, as are other advanced economies, compared to 0.6% initially estimated.
Household spending between July and September was higher than originally estimated, as was non-residential fixed investment, the Commerce Department said.
“Despite a rapid increase in interest rates, the economy is growing and, most importantly, households continue to spend. But going forward, in 2023, we expect a slower growth path, even if we do. We do not expect a slowdown in activity,” said Rubeela Farooqi , chief economist for HFE.
“Prices will remain higher for longer” in 2023
The US central bank (Fed) has been raising its key interest rate since March to slow down economic activity and thus lower inflation. It raised it again at its last meeting last week, reducing the size of the rate hike but warning that rates would remain high for a while to ensure inflation slows in a sustainable way. . Thus, according to Rubeela Farooqi, “even if growth slows to a rate below potential” in 2023, “the emphasis on reducing inflation means rates will remain higher for longer next year”.
GDP fell in the first two quarters of the year, falling by 1.6% and then by 0.6%. Without falling into recession at this stage, however, according to the Biden administration, but also many economists. They believe that while these two consecutive quarters of decline in GDP correspond to the commonly accepted definition of a recession, the solidity of the labor market in particular does not allow the world’s largest economy to enter this box.