The US economy grew for the first time this year in the third quarter, according to data released yesterday. The country’s gross domestic product (see 101) grew at an annual rate of 2.6%, rebounding from 0.6% and 1.6% decreases in the first two quarters and signaling the end of a technical recession, or two quarters of consecutive decline.
The growth was primarily driven by a narrowing trade deficit and increases in consumer and government spending. However, declines in the housing market partially offset some of the growth. Despite the news, experts expect growth to slow again in the fourth quarter and predict a recession could be likely by early next year.
In related news, the 30-year fixed-rate mortgage broke 7% yesterday for the first time since April 2002. The rising measure has been a primary driver of the slowing US housing market over the past year.