US economy grows beyond forecasts

US GDP grew strongly in the third quarter thanks to vibrant consumption, despite high interest rates, inflationary pressures and many domestic and international challenges.

The US Department of Commerce announced on October 26 that the country's GDP grew by 4.9% in the third quarter. This rate is higher than the 2.1% growth rate in the previous quarter and also slightly higher than economists' forecasts.

The growth came from consumption, exports, housing investment and public spending. Of which, consumption increased by 4%, five times the rate of the third quarter. Public spending and investment increased by 4.6%.

The third quarter was also the strongest quarter of growth for the economy since late 2021. The figures could give the US Federal Reserve (Fed) more motivation to maintain monetary tightening. However, investors are still betting that the Fed will not raise interest rates at its meeting next week. Interest rates in the US are currently at a 22-year high.

"Investors should not be surprised to see consumption remain buoyant in the third quarter. The question now is whether this trend will continue in the coming quarters. We think not," said Jeffrey Roach, chief economist at LPL Financial.

Many economists thought the US was in a mild recession. However, the world's largest economy is still maintaining its growth rate, thanks to better-than-expected consumer spending.

Consumption accounted for about 68% of GDP in the third quarter. Even as government support from the pandemic dries up, consumption remains buoyant, as people withdraw savings and use credit cards.

While the U.S. economy has shown resilience in the face of challenges, most economists expect growth to slow significantly in the coming months. However, they also believe that the U.S. will avoid a recession unless there are further unexpected shocks.

Ha Thu (according to CNN)

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