After two quarters of contraction, the U.S. economy rebounded in the third quarter to 2.6 percent.
The Democrats got an economic boost before the November midterm elections as the economy recovered to register 2.6 percent growth in the third quarter, ahead of expectations.
The positive growth figure gives the Federal Reserve more room to continue with interest rate hikes in a bid to curb inflation. The Fed has raised rates five times this year, from 0.5 percent to 3.5 percent, while inflation has remained over 8 percent since March.
Prior to the data being published, the estimates for GDP were across a fairly wide range, with a consensus of 2.4 percent. The Federal Reserve Bank of Atlanta’s GDPNow estimate had the third quarter on track for 3.1 percent growth, while analysts at Goldman Sachs predicted 1.9 percent, which was an increase from their earlier estimates of 0.9 percent.
The Bureau of Economic Analysis said of the GDP data: “The upturn primarily reflected a smaller decrease in private inventory investment, an acceleration in nonresidential fixed investment, and an upturn in federal government spending that were partly offset by a larger decrease in residential fixed investment and a deceleration in consumer spending.
