The U.S. economy experienced its most rapid expansion in nearly two years during the quarter leading up to September, propelled by a surge in consumer spending.
The economy saw a 4.9% increase on an annualized basis in the third quarter, surpassing the anticipated 4.5% growth.
This significant uptick from the 2.1% growth in the second quarter marks the most robust expansion since the final quarter of 2021, a period of recovery following the pandemic-induced lockdown.
These figures underscore the robustness of households and businesses even in the face of swiftly rising interest rates.
The Bureau of Economic Analysis officials attributed this surge in growth to “accelerations in consumer spending,” noting an increase in expenditures on both leisure activities and major purchases such as vehicles.
These economic growth figures were released in advance of the Federal Reserve’s upcoming decision on interest rates next week. While market participants anticipate that the central bank will maintain the interest rates between 5.25% and 5.5%, Jerome Powell, the Chairman of the Fed, signalled a cautious approach to future rate decisions.
He hinted that recent disturbances in the bond market might constrain additional hikes in interest rates.
