The growth of the gross domestic product (GDP) of the United States in the 3rd quarter was revised upwards this Thursday, and stood at 3.2% at an annualized rate, according to the 3rd and latest estimate published by the Department of Commerce. The first estimate reported growth of 2.6%, and it had already been revised for the first time, to 2.9%. This surprised analysts, who were not expecting another upward revision. GDP growth is 0.8% only compared to the previous quarter, the same as other advanced economies, compared to the 0.6% initially estimated.
Household consumption between July and September was higher than initially estimated, as was nonresidential fixed investment, the Commerce Department said.
“Rates will stay higher for longer” in 2023
The US central bank (Fed) has been raising its benchmark rate since March, to curb economic activity and thus lower inflation. It raised it again at its last meeting last week, though it cut the amount of the rate hike, but warned that rates would stay high for a while to ensure inflation slows sustainably. So, according to Rubeela Farooqi, “even if growth slows to a rate below potential” in 2023, “the emphasis on reducing inflation means rates will stay higher for longer next year.”
GDP contracted during the first two quarters of the year, falling 1.6% and then 0.6%. Not falling into recession at this stage, however, according to the Biden administration, but also many economists. They consider that, although these two consecutive quarters of falling GDP correspond to the commonly accepted definition of recession, the strength, in particular, of the labor market does not allow the largest economy in the world to enter this box.
Source: BFM TV
