The US economy picked up speed over the three months to September, expanding at an annual rate of 4.3 percent, up from 3.8 percent in the previous quarter. This marked the strongest growth in two years, surpassing expectations and outperforming many forecasts. The report, delayed by the US government shutdown, provided a detailed look at an economy that has been impacted by changes to trade and immigration policies, persistent inflation, and cuts to government spending.
According to the report, consumer spending jumped, contributing significantly to the growth, while exports also increased. The underlying economy has maintained solid momentum, with many experts attributing its resilience to its ability to adapt to the challenges it has faced. "This is an economy that has defied doom and gloom expectations basically since the beginning of 2022," said Aditya Bhave, senior economist at Bank of America. Speaking to the BBC's Business Today programme, Mr. Bhave described the economy as "very very resilient." He added, "I don't see why that wouldn't continue going forward."
The economy's growth has been driven by a combination of factors, including a strong labor market, low unemployment rates, and increased consumer spending. The report showed that consumer spending accounted for 67.2 percent of the overall growth, while exports contributed 12.6 percent. The growth rate of 4.3 percent was better than the 3.8 percent expected by economists and marked a significant improvement from the previous quarter.
The US economy has been buffeted by dramatic changes to trade and immigration policies, as well as persistent inflation and cuts to government spending. However, despite these challenges, the economy has maintained its momentum, outperforming many forecasts. The resilience of the economy has been a surprise to many experts, who had predicted a more sluggish performance.
The growth in the US economy has had a positive impact on the stock market, with shares of companies that benefit from a strong economy, such as retailers and manufacturers, experiencing gains. The Dow Jones Industrial Average rose 1.2 percent on the news, while the S&P 500 index gained 1.5 percent. The strong growth in the US economy has also had a positive impact on the global economy, with many experts predicting that it will continue to drive growth in the coming months.
The US government shutdown had delayed the release of the report, but its publication has provided a much-needed update on the state of the economy. The report is expected to be closely watched by policymakers and economists, who will be looking for signs of continued growth and stability in the economy. As the economy continues to grow, experts will be watching for signs of inflation and potential overheating, which could impact the economy's momentum.
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