Loading...

US Economy Grew 3.2% in Q3, an Upgrade From Earlier Estimate

December 22, 2022by Paul Wiseman, Associated Press Economics Writer
US Economy Grew 3.2% in Q3, an Upgrade From Earlier Estimate
Norfolk Southern locomotives are moved in the Conway Terminal in Conway, Pa., Thursday, Sept. 15, 2022. .(AP Photo/Gene J. Puskar, File)

WASHINGTON (AP) — Shrugging off rampant inflation and rising interest rates, the U.S. economy grew at an unexpectedly strong 3.2% annual pace from July through September, the government reported Thursday in a healthy upgrade from its earlier estimate of third-quarter growth.

The rise in gross domestic product — the economy’s output in goods and services — marked a return to growth after consecutive drops in the January-March and April-June periods.

Still, many economists expect the economy to slow and probably slip into recession next year under the pressure of higher interest rates being engineered by the Federal Reserve to combat inflation that earlier this year reached heights not seen since the early 1980s.

Driving the third-quarter growth were strong exports and healthy consumer spending.

Investment in housing plunged at an annual rate of 27.1%, hammered by higher mortgage rates arising from the Fed’s decision to raise its own benchmark rate seven times this year.

Thursday’s GDP report was the Commerce Department’s third and final look at the July-September quarter. The first look at the fourth quarter comes out Jan. 26. Forecasters surveyed by the Federal Reserve Bank of Philadelphia expect the economy to grow again the last three months of the year — but at a slower, 1% annual rate.

In its previous estimate of third-quarter growth, issued Nov. 30, the Commerce Department had pegged July-September growth at an annual rate of 2.9%. Behind the upgrade to Thursday’s 3.2% was stronger growth in consumer spending, revised up to a 2.3% annual rate from 1.7% in the November estimate.

“Despite a rapid increase in interest rates, the economy is growing and importantly, households are still spending,″ Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said in a research note. “However, looking ahead, in 2023, we expect a slower growth trajectory.″

Inflation, which had not been a serious problem for four decades, returned in the spring of 2021. It was set off by an unexpectedly strong recovery from the coronavirus recession of 2020, fueled by massive government stimulus. The Fed was slow to recognize the severity of the inflation problem and only began raising rates aggressively in March.

The job market has stayed resilient throughout, putting upward pressure on wages and prices. Employers have added 392,000 jobs a month so far this year, and the unemployment rate is at 3.7%, just off a half-century low.

  • GDP
  • In The News

    Health

    Voting

    Business

    Sustainable Till Death Do Us Part, and 45 Days Beyond

    DELFT, Netherlands (AP) — For those seeking to live in the most sustainable way, there now is an afterlife too.... Read More

    DELFT, Netherlands (AP) — For those seeking to live in the most sustainable way, there now is an afterlife too. A Dutch intrepid inventor is now “growing” coffins by putting mycelium, the root structure of mushrooms, together with hemp fiber in a special mold that, in... Read More

    May 23, 2023
    by Dan McCue
    MOUs Expand Right-to-Repair to 70% of Ag Machinery Sold in US

    WASHINGTON — Two new agreements reached between the American Farm Bureau Federation and agricultural equipment manufacturers represent a dramatic expansion... Read More

    WASHINGTON — Two new agreements reached between the American Farm Bureau Federation and agricultural equipment manufacturers represent a dramatic expansion of farmers’ and ranchers’ right to repair their own farm equipment. The memoranda of understanding with manufacturers AGCO and Kubota, announced Monday, follow earlier agreements the... Read More

    Independent Bookselling Expanded Again in 2022

    NEW YORK (AP) — Near the end of 2021, Jessica Callahan was living in Columbus, Ohio, working as a social... Read More

    NEW YORK (AP) — Near the end of 2021, Jessica Callahan was living in Columbus, Ohio, working as a social science researcher and wondering if there was a better way to support herself. Her friends Julie Ross and Austin Carter had similar thoughts and a similar... Read More

    With All the Politics and Maneuvering, How Is Life in Florida Changing for Its Residents?

    TALLAHASSEE, Fla. (AP) — “Don't say gay.” Regulation of books and classroom discussion. Teachers, parents and school librarians all navigating... Read More

    TALLAHASSEE, Fla. (AP) — “Don't say gay.” Regulation of books and classroom discussion. Teachers, parents and school librarians all navigating new and uncertain ground. LGBTQ+ rights under attack. A very public spat between state government and Disney. And at the center of it all is a... Read More

    May 15, 2023
    by Dan McCue
    Supreme Court Declines to Reconsider Patent Eligibility Test

    WASHINGTON — The Supreme Court on Monday declined to hear two cases dealing with patent eligibility, rejecting Solicitor General Elizabeth... Read More

    WASHINGTON — The Supreme Court on Monday declined to hear two cases dealing with patent eligibility, rejecting Solicitor General Elizabeth Prelogar’s call for the justices to bring “much-needed clarification” to an area over which federal appeals courts have repeatedly disagreed in recent years. Traditionally, the U.S.... Read More

    Twitter's New CEO is an NBCUniversal Executive With Deep Ad Industry Ties

    Elon Musk confirmed that the new CEO for Twitter will be NBCUniversal’s Linda Yaccarino, an executive with deep ties to the advertising... Read More

    Elon Musk confirmed that the new CEO for Twitter will be NBCUniversal’s Linda Yaccarino, an executive with deep ties to the advertising industry. “I am excited to welcome Linda Yaccarino as the new CEO of Twitter!” Musk wrote in a Friday tweet. He added that Yaccarino “will focus... Read More

    News From The Well
    Exit mobile version