The US economy grew faster than previously expected in the third quarter of the year, when preliminary data published by the Commerce Department in Washington somehow pointed to better-than-expected growth, Reuters reported.
The United States’ gross domestic product grew 5.2 percent in the previous quarter, according to the latest data released Wednesday by the Commerce Department’s Bureau of Economic Analysis. It also noted that the US economy expanded between July and September at the fastest pace since the fourth quarter of 2021.
According to preliminary data released by the US government on October 26, GDP growth in the third quarter of the year was 4.9%. The actual result was even better than analysts polled by Reuters had expected, who had forecast a 5% rise in the updated data.
Economists blame higher-than-expected private business investment and increased spending by the federal and state governments. Investments in real estate were also revised upwards.
But individual consumption, which generates more than two-thirds of US economic activity, fell in October for the first time in seven straight months. Analysts blame several factors for the situation: from seasonal fluctuations (Americans saving for Black Friday and the Christmas period) to rising unemployment.
Rising unemployment has investors hoping that the Fed will abandon its aggressive monetary policy
The pace of job creation slowed last month in the US, while the unemployment rate rose to 3.9%, the highest level in nearly 2 years.
The fall in demand has investors re-attuning that the Federal Reserve, the central bank in Washington, will end its policy of aggressively raising the benchmark interest rate to keep inflation under control.
While investors had expected the Fed to cut interest rates at the start of the year to stave off the risk of a recession, the US central bank maintained its anti-inflationary stance as the US economy proved stronger than almost all analysts had predicted.
Some investors now expect the Fed to start cutting interest rates from the middle of next year, ahead of the presidential election in November. This will help create new jobs, which is always a key topic during the US presidential debates.
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Source: Hot News
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