There has been a tremendous boom in the American economy. The US economy grew at an annual rate of 4.9 per cent in the third quarter, the most robust pace since 2021. The increase in spending by households, businesses, and the government is assessing this. Even with rapidly rising borrowing costs, the figures have witnessed a surge. This is considered to be more than expected.
The Bureau of Economic Analysis released its latest figures on Thursday. New government data shows gross domestic product increased between July and September. Due to this, growth remained limited for five consecutive quarters, when there was a fear of recession for a long time.
This economic boom is said to result from an increasing number of jobs and additional savings during the pandemic. This allowed people to spend despite inflation and rising interest rates. Government hiring also increased, including 214,000 new jobs between July and September.
KPMG chief economist Diane Swonk said: “We have seen the most aggressive credit from the Federal Reserve since the 1980s. The economy is booming. However, we underestimated how much consumers can spend.”
According to experts, businesses and the federal government continued to spend during this period, although GDP declined slightly due to declining non-residential investment. Overall, the latest growth in GDP is more than double the previous quarter’s annual growth rate of 2.1 per cent.
Economists say economic growth will likely slow later this year as pandemic-era savings are exhausted. Lakhs of families have resumed education loan payments. Fears of a government shutdown, ongoing strikes by actors and auto workers, and worsening wars in Ukraine and Gaza also add to the uncertainty.
“The US consumer is fighting very hard and keeping the economy moving, but I expect prolonged growth for the rest of the year,” said Mark Zandi, chief economist at Moody’s Analytics.
