US Economy Expected to Grow at Fastest Pace in Nearly Two Years, Defying Recession Warnings
The US economy is projected to have grown at its fastest rate in almost two years during the third quarter, defying fears of a recession. The anticipated growth is attributed to increased consumer spending fueled by higher wages from a tight labor market. The Commerce Department’s advance estimate of third-quarter gross domestic product (GDP) is also expected to show a rebound in residential investment after nine consecutive quarters of declines. However, business investment is predicted to have slowed due to the diminishing boost from factory construction. The resilience of the economy despite aggressive interest rate hikes from the Federal Reserve highlights its ability to withstand potential challenges. While the robust growth rate is unlikely to be sustainable, economists believe that the Fed can engineer a “soft-landing” for the economy by moderating worker productivity and labor costs. The GDP data is not expected to significantly impact near-term monetary policy, as financial conditions have already tightened.
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