U.S. economy grows for 1st time in 6 months


The U.S. reported growth of 2.6 percent in the third quarter, the first increase in 6 months, The Washington Post reports. The increase comes as the threat of recession looms overhead, and just ahead of midterm elections where inflation has been a pressing issue.
However, according to The New York Times, experts say it's too early to celebrate. Michael Gapen, chief U.S. economist for Bank of America said "[i]gnore the headline number — growth rates are slowing." While consumer spending, 70 percent of U.S. economic activity, grew at a 1.4 percent annual pace, it is still less than the 2 percent growth in the second quarter, reports The Associated Press.
There is also the possibility that the growth is short-lived since much of it came from the rise in exports as well as government spending, AP continues. Growth from exports will be difficult to sustain as the value of the dollar goes up and makes goods pricier.
Economists also expect consumer spending to decrease in the future as businesses and consumers pull back in the face of rising interest rates, the Post continues. Said slump is still projected to cause a recession. The rising interest rates also affected housing investment, with the sector shrinking by 7.4 percent in the third quarter, the Times reports.
Some promising news is a price index in the GDP data increased at a 4.1 percent annual rate in Q3, down from 9 percent in Q2, which could lead the Federal Reserve to slow its rate hikes.
Devika Rao has worked as a staff writer at The Week since 2022, covering science, the environment, climate and business. She previously worked as a policy associate for a nonprofit organization advocating for environmental action from a business perspective.
-
From Da Vinci to a golden toilet: a history of museum heists
In the Spotlight Following the ‘spectacular’ events at the Louvre, museums are ‘increasingly being targeted by criminal gangs’
-
Can Gen Z uprisings succeed where other protest movements failed?
Today's Big Question Apolitical and leaderless, youth-led protests have real power but are vulnerable to the strongman opportunist
-
The allegations of Christian genocide in Nigeria
The Explainer West African nation has denied claims from US senator and broadcaster
-
Gold tops $4K per ounce, signaling financial unease
Speed Read Investors are worried about President Donald Trump’s trade war
-
Why are beef prices rising? And how is politics involved?
Today's Big Question Drought, tariffs and consumer demand all play a role
-
Electronic Arts to go private in record $55B deal
speed read The video game giant is behind ‘The Sims’ and ‘Madden NFL’
-
Fed cuts interest rates a quarter point
Speed Read ‘The cut suggests a broader shift toward concern about cracks forming in the job market’
-
New York court tosses Trump's $500M fraud fine
Speed Read A divided appeals court threw out a hefty penalty against President Trump for fraudulently inflating his wealth
-
Trump said to seek government stake in Intel
Speed Read The president and Intel CEO Lip-Bu Tan reportedly discussed the proposal at a recent meeting
-
US to take 15% cut of AI chip sales to China
Speed Read Nvidia and AMD will pay the Trump administration 15% of their revenue from selling artificial intelligence chips to China
-
NFL gets ESPN stake in deal with Disney
Speed Read The deal gives the NFL a 10% stake in Disney's ESPN sports empire and gives ESPN ownership of NFL Network