US GDP growth rises to 3.2 points this quarter compared to this quarter
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The first estimate called for growth of 2.6 percent, and had already been revised up once to 2.9 percent. That surprised analyst, who had not expected a further upward revision.
GDP growth was 0.8% quarter-over-quarter, as is the case in other advanced economies, compared to the original estimate of 0.6%.
Residential consumption between July and September was higher than originally estimated, as was investment in nonresidential fixed assets, the Treasury Department said.
"Despite skyrocketing interest rates, the economy is growing and, more importantly, the population continues to spend money. Looking ahead to 2023, however, we expect growth to slow, although we don't expect activity to decline," said Rubila Farooqi, chief economist at HFE.
The U.S. Central Bank (Fed) has been raising its key interest rate since March to slow economic activity and thereby lower inflation.
At its last meeting last week, it raised rates again, though it lowered the size of the increase, but warned that rates will remain high for some time to ensure a sustained slowdown in inflation.
Thus, Rubila Farooqi said, "even if growth slows to below potential" in 2023, "the focus on lower inflation means that rates will remain higher next year."
GDP contracted by 1.6 percent in the first two quarters and then by 0.6 percent. However, according to the Biden administration, and many economists, at this point we are not talking about a crisis.
They believe that while these two consecutive quarters of declining GDP fit the generally accepted definition of a recession, the strength of the labor market, in particular, does not allow the world's leading economy to be classified in that category.