The US economy grew 2.8% between July and September

By Samuel Gonzalez

Oct 30, 2024, 12:59 PM EDT

The United States economy grew at an annual rate of 2.8% in the last recorded quarter of this year between July and September. Despite high interest rates, consumers continue to open their wallets to the surprise of many analysts.

The United States Bureau of Economic Analysis (BEA) presented its quarterly report on the Gross Domestic Product (GDP), which reflected that American consumers continue to spend significantly, despite inflationary challenges and high rates of inflation. interest in the country. BEA recalled that This growth figure was slightly lower than the 3% recorded in the second quarter.

Analysts’ expectations were that the country’s GDPwhich measures the total value of goods and services produced, will reach 2.6% in this periodaccording to a survey by data firm FactSet. Despite widespread predictions of a possible recession, the U.S. economy has demonstrated surprising resilience.

This is due, in part, to The Federal Reserve has maintained a restrictive monetary policy to control inflation. Despite higher interest rates, the labor market has remained strong. Hiring and consumer spending have remained stable, which has contributed to this growth.

The recently released GDP report is one of the last major economic indicators before the November 5 election. The monthly employment report due out on Friday is expected to indicate that employers hired 120,000 workers in October. This pace is slower than September’s 254,000 new jobs, according to FactSet. However, recent events such as hurricanes and the East Coast port strike could affect these numbers.

“Despite initial fears that the U.S. economy was heading toward a recession, growth continued to outpace other developed markets,” said Paul Ashworth, chief North American economist at Capital Economics, in a research note published on Wednesday. “Overall, the U.S. economy appears to be performing well, particularly as the ADP payrolls survey suggests private employment rose by 233,000 this month.”

Another positive indicator has been the increase in consumer confidence, which reached its highest level since January 2024, according to the Conference Board. This increase in confidence can be a sign that American households will continue to spend.

“The percentage of consumers expecting a recession in the next 12 months fell to its lowest level since the question was first asked in July 2022, and just under two-thirds of respondents believe it is somewhat or very likely.” that there will be a recession in the next 12 months,” analysts at PNC Financial Services Group noted in a report.

Domestic demand has been strong this quarter. Economists point out that Consumer spending and investment in equipment have been the main drivers of growth. Olu Sonola, of Fitch Ratings, mentions that “with consumer spending growth exceeding 3.5%, the American consumer shows no signs of slowing down.”

“With such a strong economy, it is difficult to imagine labor market conditions deteriorating dramatically in the short term,” Sonola concluded.

Simply put, economists are optimistic for the remote future of the U.S. economy, based on recent numbers. The combination of solid consumer spending, renewed confidence and a strong labor market suggests the U.S. economy remains on a growth trajectory.

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