The U.S. Commerce Department announced on Thursday that the economic growth rate in the United States for the third quarter exceeded previous estimations. Gross domestic product (GDP) climbed by 3.1% during that period, an upward adjustment from the initially reported 2.8% increase. This revision defied economists’ expectations, who had anticipated the growth rate would remain unchanged.
According to the department, the upward revisions in exports and consumer spending were significant enough to counteract the downward revision in private inventory investment and an increase in imports, the latter of which typically detracts from GDP calculations.
As a result of this adjustment, the GDP growth for the third quarter now represents a slight acceleration from the 3.0% growth recorded in the second quarter. This increase is attributed mainly to boosted exports, heightened consumer expenditure, and rising federal government spending.
Conversely, the improvement in GDP growth was somewhat balanced by a decline in private inventory investment, a greater reduction in residential fixed investment, and accelerated imports.
Commenting on the developments, Oren Klachkin, Nationwide Financial Markets Economist, remarked, "The data from this week indicates that the economy is poised to conclude 2024 robustly, which is advantageous given the potential for increased policy uncertainty and possible challenges in 2025." He further projected, "Following an estimated 2.5% annualized progression this quarter, we anticipate the economy to expand by about 2% next year, with both upside and downside risks to this forecast."
Simultaneously, the Commerce Department noted that consumer price growth for the third quarter remained unchanged at 1.5%, indicating a significant deceleration from the 2.5% increase witnessed in the second quarter. Furthermore, core consumer prices, which exclude food and energy expenditures, saw a slight upward adjustment of 0.1 percentage point to 2.2%, yet this still illustrates a slowdown from the 2.8% increase recorded in the previous quarter.
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