The nation’s economy expanded at a robust 4.9% annual rate from July–September, the Associated Press reports, as Americans defied higher prices, rising interest rates, and widespread forecasts of a recession to spend at a brisk pace. The Commerce Department said the economy expanded last quarter at the fastest pace in more than two years — and more than twice the 2.1% annual rate of the previous quarter.
Today’s report on the nation’s gross domestic product showed that consumers drove the acceleration, ramping up their spending on everything from cars to restaurant meals. Last quarter’s robust growth, though, may prove to be a high-water mark for the economy before a steady slowdown begins in the current October–December quarter and extends into 2024.
The growth figures for the third quarter revealed that federal, state, and local governments ramped up their spending, and businesses built up their stockpiles of goods in warehouses and on shelves, which helped drive growth higher.
Several Fed officials acknowledged in speeches last week that the most recent economic data showed growth picking up by more than they had expected. Still, most of the policymakers signaled that they will likely keep their key rate, which affects many consumer and business loans, unchanged when they meet next week.
Fed Chair Jerome Powell will hold a news conference Wednesday that will be scrutinized for any hints about the Fed’s next moves.
