GDP Surges on Spending
The US gross domestic product grew at an annualized rate of 4.9% in the third quarter of the year, surpassing analysts' expectations of 4.7%, according to preliminary data released yesterday. The figure represents the fifth straight month of growth and is the largest gain in nearly two years.
Strong consumer spending—which accounts for two-thirds of GDP—played a pivotal role, rising 4% for the quarter and contributing 2.7 percentage points to the total increase. Despite inflation and rising interest rates, consumers continued to spend on items like cars, restaurants, and concert tickets, while exports, private inventory investment, and federal government spending also increased.
However, analysts predict a slowdown, with fourth quarter growth projected at 1.5%. Challenges impacting the GDP include the resumption of student loan repayments, a potential government shutdown, and increased long-term interest rates. The Federal Reserve’s benchmark short-term rate reached 5.4%, the highest in 22 years, and it is likely to remain unchanged at the meeting next week.
The total US GDP is $27.6T. See historical data here.