America’s economy is at a historic point ahead of presidential election
By Bryan Mena, CNN
Washington (CNN) — The US economy seems to have pulled off a remarkable and historic achievement.
Gross domestic product, which measures all the goods and services produced in the economy, expanded at an annualized rate of 2.8% in the third quarter, the Commerce Department said Wednesday. That’s a slightly weaker pace than the second quarter’s 3% rate and above the 2.6% rate economists projected in a FactSet poll. GDP is adjusted for seasonal swings and inflation.
As the US economy continued to expand from July through September, inflation drifted lower toward the Federal Reserve’s 2% target during that same period, the report showed. Several economists tell CNN that the economy has finally pulled off an exceptionally rare achievement known as a soft landing, a scenario in which inflation is tamed without a recession.
“I think we should declare a soft landing now,” said James Bullard, former president of the Federal Reserve Bank of St. Louis, in an interview with CNN earlier this month.
American shoppers continued to fuel economic growth in the third quarter with their spending, according to the report. That marked the biggest contributor to GDP growth in the third quarter by far. Consumer spending accounts for about 70% of economic output. Spending accelerated sharply in the third quarter, driven by purchases of big-ticket items, while spending on services eased a bit.
Meanwhile, businesses continued to invest during the July-through-September period, though at a slightly softer pace than earlier in the year. Government spending at both the federal and state level also contributed to third-quarter economic growth.
The Fed slashed interest rates in September for the first time in more than four years, by a bold half point. It was a sign that Fed officials felt confident enough that inflation had come under control just enough to begin paring back rates to shift more attention to the job market. The Fed is tasked by Congress to stabilize prices and maximize employment through its interest rate policy.
Economic data released this week has looked robust so far: Consumer confidence jumped in October by the fastest clip since March 2021 and also in October, the private sector added twice as many jobs than what economists expected. Wednesday’s GDP report showed that the US economy remains on solid footing.
President Joe Biden touted the US economy’s latest show of strength, saying Wednesday the GDP report “shows how far we’ve come since I took office — from the worst economic crisis since the Great Depression to the strongest economy in the world.”
A White House official on a call with reporters Wednesday morning said that annual average economic growth during the Biden-Harris administration has been stronger than any administration in this century.
The-CNN-Wire
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