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The US economy rebounded following two quarterly contractions thanks in part to resilient consumers and businesses, though inflation and higher interest rates leave growth vulnerable in the coming months.
Gross domestic product rose at a 2.6 per cent annualised rate in the July to September period after falling for the first two quarters, the Commerce Department’s preliminary estimate showed on Thursday. Personal consumption, the biggest part of the economy, climbed at 1.4 per cent, better than forecast but still a slowdown from the prior quarter.
The median projection in a Bloomberg survey of economists called for a 2.4 per cent rise in GDP and a 1 per cent advance in personal consumption.
That said, a key gauge of underlying demand that strips out the trade and inventories components — inflation-adjusted final sales to domestic purchasers — rose 0.5 per cent in the third quarter, one of the slowest since the start of the pandemic.
While the details of the report showed firm business investment and continued consumer spending on services, the biggest contributor to GDP was the volatile net exports category.
