US economy grows beyond expectations

On October 26, the US Department of Commerce released data showing that economic growth in the third quarter of 2023 reached 4.9%, the highest level since 2021.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is the main driver of economic growth. Specifically, the positive growth rate was due to U.S. consumer spending, which contributed about 68% of GDP in the third quarter. Consumer spending on goods increased by 4.8%, while that on services increased by 3.6%.

US inflation has fallen to 3.7%, still above the expected 2% target, but has cooled in recent months after peaking at 9.1% in the summer of 2022.

Although wage growth has slowed, it is still rising faster than inflation, boosting households’ purchasing power. Several Fed officials acknowledged this week that the latest economic data showed the economy was growing faster than they expected.

While the strong growth recorded is unlikely to be sustainable, it is a testament to the resilience of the US economy, despite the Federal Reserve’s interest rate hikes. Economists are of the view that the world’s number one economy can weather the recession without any unforeseen shocks.

US economic growth could slow in the fourth quarter of 2023 due to strikes by the United Auto Workers (UAW) union and the continued repayment of student loans by millions of Americans.

Financial markets expect the Fed to keep interest rates unchanged at its policy meeting from October 31 to November 1.

Since March, the Fed has raised interest rates by 525 basis points, to the current range of 5.25-5.50% to curb inflation.

Minh Hoa (t/h according to Vietnam+, VTV)

Source: https://www.nguoiduatin.vn/kinh-te-my-tang-truong-vuot-ky-vong-a633051.html