The US economy grew by 2.6% in the third quarter of this year, exceeding expectations, and breaking the negative trend. Annual quarterly GDP data showed a decline in the previous two quarters, so the current data brings some relief regarding the state of the country’s economy.
The growth of the economy was supported by the fact that exports, consumer spending, non-residential fixed asset investment, and government spending also increased. At the same time, the decline in private investment has led to a downturn in the economy. Regarding the data, it is worth noting that the increase in federal government spending was driven by the increase in defense spending.
Analysts note that the resumption of economic growth occurred before crucial congressional elections in the fall, but economists warn that the good news cannot last long. Most believe a recession is expected next year, MarketWatch reports. The Fed’s rate hike – which it would have to do in order to break inflation – will slow the economy going forward and raise borrowing costs, but the big question will be how far the economic outlook will deteriorate.
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