WASHINGTON, Oct 26 — The US economy heated up in the third quarter, government data showed today, as a resilient job market helped boost consumer spending, holding off the prospect of a recession.
Gross domestic product growth came in at an annual rate of 4.9 per cent for the July to September period, the quickest pace since late-2021, according to Commerce Department figures.
Analysts have raised fears of a downturn as the US central bank started lifting interest rates rapidly last year to fight inflation, but the world’s biggest economy has so far defied these predictions.
A key factor is the strong labour market, which has provided healthy wage growth, allowing consumers to keep spending even as they draw down on pandemic-era savings.
The latest GDP figure is a significant bump from the second quarter’s 2.1 per cent growth and higher than the 4.0 per cent figure that analysts expected.
It also comes as President Joe Biden works to bolster sentiment on his handling of the economy as he seeks reelection in 2024.
The pick up reflects “accelerations in consumer spending, private inventory investment, and federal government spending” among other factors, said the Commerce Department.
Biden has lauded low US unemployment, slowing inflation and continued growth, citing an economic agenda he dubs “Bidenomics.”
But polls have indicated that voters remain sceptical over his management, adding to challenges as he seeks reelection next year. — AFP