The American economy defied all expectations of entering a recession, registering the fastest growth rate in the last two years in the third quarter, Reuters and Agerpres report.
A preliminary estimate released Thursday by the Commerce Department in Washington showed that on an annualized basis, U.S. gross domestic product rose 4.9% in the third quarter, more than double the 2.1% increase recorded in the second quarter.
Even if it is unlikely that these steady growth rates will be maintained in the near term, the figures recorded between July and September 2023 are evidence of the resistance of the world’s largest economy to the aggressive campaign of raising interest rates launched by the Federal Reserve System. .
Household consumption spending, which accounts for more than two-thirds of US economic activity, was the main driver of the acceleration in growth.
In addition, a strong labor market supports spending by American households. This positive labor market situation was also supported by a separate Labor Department report showing that initial jobless claims rose to 210,000 in the week ended Oct. 21, from 200,000 in the previous week.
The US economy has turned out to be more resilient than most economists expected
Most economists have revised down their pessimistic forecasts at the beginning of the year and in the coming months, now believing that the Fed will be able to make a soft landing on the economy that will allow inflation to slow down without raising unemployment or getting the economy out of order, into recession.
In 2022, the growth rate of the US economy slowed to 2.1%, after recording the strongest growth since 1984 (5.9%) in 2021. This comes after the US recorded its strongest rebound in GDP since 1946 in 2020 (minus 3.5%) and two months of recession due to Covid-19.
Analysts do not expect the latest gross domestic product data to have an immediate impact on monetary policy, given that rising US government bond yields and a sell-off in stocks have strengthened financial conditions.
Most analysts expect the Fed to leave interest rates unchanged at its Oct. 31-Nov. 1 meeting after raising borrowing costs by 525 basis points since last March to the current range of 5.25%-5.50%.
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Source: Hot News
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