By Admin
The U.S. economy posted its first period of positive growth for 2022 in the third quarter, at least temporarily easing recession fears, according to the Bureau of Economic Analysis
GDP, a sum of all the goods and services produced from July through September, increased at a 2.6 percent annualized pace for the period, according to the advance estimate.
That was above against the Dow Jones forecast for 2.3 percent
That reading follows consecutive negative quarters to start the year, meeting a commonly accepted definition of recession, though the National Bureau of Economic Research is generally considered the arbiter of downturns and expansions.
The growth came in large part due to a narrowing trade deficit, which economists expected and consider to be a one-off occurrence that won’t be repeated in future quarters.
GDP gains also came from increases in consumer spending, nonresidential fixed investment and government spending. The report reflected an ongoing shift to services spending over goods, with spending on the former increasing 2.8 percent while goods spending dropped 1.2 percent
Declines in residential fixed investment and private inventories offset the gains, the BEA said.
“Overall, while the 2.6 percent rebound in the third quarter more than reversed the decline in the first half of the year, we don’t expect this strength to be sustained,” wrote Paul Ashworth, chief North America economist at Capital Economics.
“Exports will soon fade and domestic demand is getting crushed under the weight of higher interest rates. We expect the economy to enter a mild recession in the first half of next year.”
