Thursday, June 8, 2023

US economy comes out of recession and grows 0.6% in third quarter

According to the Bureau of Economic Analysis (BEA) data available today, the economy of the United States of America (USA) has overtaken the decline that put it into a technical recession and grew again by 0.6% in the third quarter.

According to the first official calculation done by this office of Gross Domestic Product (GDP) growth, the annual growth rate was also 2.6%.

The world’s first economy had contracted 0.4% and 0.1%, respectively, in the first two quarters of the year, which is considered a technical slowdown.

The growth in GDP from July to September was likely due to improvements in export and consumer spending, as well as nonresidential investment and federal, state and local public spending, which partially offset the decrease in investment residential and other investments. Is.

In a more detailed analysis, the BEA shows that there are several components of the economy that are not yet recovering, such as household consumption in times marked by high inflation.

Statistics show that consumer spending improved due to an increase in services such as health or travel expenses, although consumption of goods fell.

In the latter case, it was reduced mainly to automobiles, and was also destined for food and beverages.

As for increased public spending, it stems from higher defense spending in the case of the federal government and increased employee compensation by state and local governments.

The decline in residential investment was noted in family buildings and in lower commissions from real estate vendors.

But the effect of reduction in investment was visible in the business.

The return of economic growth in this third quarter has come in a context marked by high inflation and resulting increased interest rates or problems in the supply chain, but also low unemployment and a stronger dollar.

The BEA does not venture to calculate the effects that these factors, whether positive or negative, can have on GDP, and recalls that this is the first calculation on economic growth, which may differ in subsequent calculations.

In any case, the positive data known today, which exceeded expectations of economists and markets, gives the administration headed by Joe Biden a pause two weeks before the midterm election at a crucial political moment.

According to most polls, economic conditions and high inflation are exactly the two factors that will weigh the most on the American vote.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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