The US economy grew steadily in the third quarter, with the support of broad-based gains in consumer spending and consistent business investment. As per the second estimate of the Bureau of Economic Analysis figures showed Wednesday, the GDP increased at an annualized pace of 2.8% in Q3. Consumer spending mostly extended the growth this year, by 3.5%. While still strong, household spending was revised downwards from the earlier estimate, reflecting less spending on merchandise. On the other side, business investment in research and development was revised upward.
The GDP report highlights the strength of economic expansion through persistent inflation, high borrowing costs and political uncertainty. However, the Federal Reserve has begun curbing interest rates, while progress on inflation has slowed recently. With the return of Donald Trump in the White House, American businesses and consumers are expecting the rollout of new economic agenda.
The government’s other key measures of the economic activity including gross domestic income (GDI), rose 2.2% after a revised annualized pace, which stood at 2% in the second quarter. The average growth rate of GDP and GDI rose till 2.5% in the third quarter. GDP observes revenues spent on goods and services whereas GDI oversees income generated and costs incurred from producing those same goods and services.
