DORAL, FL – The U.S. economy grew by 5.2% from July through September, the Bureau of Economic Analysis reported Wednesday.
While the government had initially estimated that the economy grew at a 4.9% annual rate last quarter, this reflects a better scenario which confirms the economy accelerated from its 2.1% rate from April through June.
This boost in the third quarter comes primarily from an increase in consumer spending and inventory investment. The first one rose at a 3.6% annual rate from July through September, less than the previous estimate of 4%, while consumer prices rose to 3.2% last month from 12 months earlier, an improvement from the 9.1% year-over-year inflation recorded in June 2022.
Private investment surged at a 10.5% annual pace, including a 6.2% increase in housing investment from 3.9%.
Companies building inventories also contributed to the good news, adding 1.4 percentage points to quarterly growth. An uptick in spending and investment by governments at all levels (federal, state and local) too made the economy grew.
In addition, nonresidential fixed investment, or business spending, was revised up to a growth rate of 1.3% in the third quarter from a decline of 0.1%.
But despite the fast pace experienced in the third quarter, the US economy is expected to grow at a much slower rate in the last months of the year as pandemic savings shrink and interest rates remain at a 22-year high, experts predict.
Real-time estimates of fourth-quarter GDP are also reflecting a slower pace of growth. The Atlanta Fed is currently projecting fourth-quarter GDP to come in at a 2.1% annualized rate.
And as far as spending goes, it is believed the fourth quarter probably won’t be as active. Retail sales fell in October for the first time in seven months, declining 0.1% that month from September. The economic activity also slowed down last month in both the services and manufacturing sectors.
Photo by: Pixabay.com