US economy rebounds from recession despite inflation storm
Despite surging inflation, the US economy is doing great. There are large increases in GDP in the third quarter, but the fear continues.
Despite a shrinking trade deficit and strong economic growth in the third quarter, domestic demand was at its lowest level in two years due to the Federal Reserve's aggressive interest rate increases. Apart from inflation, there is a optimistic outlook in the US economy. As consumers demonstrated their resilience in the face of widespread inflation, the third quarter of this year saw the first advance in the US economy.
US returned to growth as real GDP rebounds in Q3
The preliminary estimate released by the Commerce Department on October 27 revealed that GDP increased at an annualized rate of 2.6% from July to September in the US, following a decline for the first two quarters. This meant first advance in this year. The economy's largest component, personal consumption, expanded at a rate of 1.4%, which was higher than anticipated but still slowed from the previous quarter.
The report's details showed that businesses were investing and that people were still spending money on services, but the volatile net exports category was the biggest part of the advance in the GDP. Government spending also increased strongly, but growth was significantly slowed by the housing sector.
The US economy's main contributor, consumer spending, continues to be under pressure from the highest inflation in a generation, despite the quarterly expansion's potential to ease fears of a recession. However, inflation continues to be unbearably high. After rising at a rate of 4.7% in the preceding quarter, the personal consumption expenditures price index increased at a rate of 4.5% percent.
