The US economy exhibited solid growth in Q3, primarily propelled by an all-round rise in consumer expenditures and consistent business investment. As per the Bureau of Economic Analysis’ second figure estimates released on Wednesday, the Gross Domestic Product (GDP) escalated at an annualized rate of 2.8% during the third quarter.
The engine driving this growth was consumer spending, which surged by 3.5%, marking the highest increase of the year. However, this robust household spending was rather moderately revised down from the preliminary reading owing to slightly diminished outlays for goods. Meanwhile, businesses’ expenditure on research and development was revised upwards.
In spite of numerous challenges, such as continuous price pressures, high borrowing costs and political uncertainty, this GDP report illustrates the resilience of economic expansion. The Federal Reserve has commenced curtailing interest rates as inflation progresses at a more leveled pace recently.
Following Donald Trump’s re-election, businesses and consumers in the US are looking forward to his economic agenda scheduled for unveiling next year.
Gross Domestic Income (GDI), the government’s alternate metric for gauging economic activity, ascended by 2.2% after the Q2 revision to an annualized rate of 2%. The GDI evaluates income generated and costs incurred while producing goods and services. The average growth of the two measures during Q3 stood at 2.5%.
The GDI report also includes corporate profit numbers. Post-tax profits saw no significant alteration. Aggregate profit margins, as indicated by profits as a share of gross value added for non-financial corporations, marginally raised to 15.6% from 15.5% recorded in the previous quarter.
