US third quarter GDP estimate revised upwards on second reading

Consumer spending continues to help U.S. economic growth and housing is surprisingly also showing growth, according to the Bureau of Economic Analysis. (iStock) The second estimate for real gross domestic product (GDP) in the third quarter of 2023 showed that U.S. economic growth was more substantial than previously projected, partly driven by resilient consumer and residential investments, according to the Bureau of Economic Analysis (BEA). Real GDP increased at an annual rate of 5.2% for the July-through-September period after rising 2.1% in the second quarter this year, according to the BEA’s second estimate released Thursday. The reading comes above the BEA’s original GDP estimate for the third quarter, which showed the economy increased at a rate of 4.9%, primarily reflecting an increase in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, residential fixed investment, and nonresidential fixed investment. And it beats economic forecasts at a moderately more robust pace than previously believed. The continued economic growth quiets concerns that the Federal Reserve’s restrictive monetary policy could push the U.S. economy into a recession this year. The Fed has raised interest rates 11 times since March of last year, pushing the federal funds rate to a 22-year high of 5.25% to 5.5% in a bid to slow the economy and lower soaring inflation. “Today’s revised GDP numbers reflect the fact that the economy hasn’t completely slowed down yet,” CoreLogic Chief Economist Dr. Selma Hepp said. “The Fed will be pleased GDP remains strong while it continues to get inflation under control. However, all eyes are on reports due tomorrow that show the expectation that jobless claims are rising while incomes and personal spending are dropping. This indicates that the economy is headed toward a so-called soft landing, which is a moderate slowdown in economic […]

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By Donato