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In Q3 2023, the US economy demonstrated robust growth, expanding by an annualized rate of 4.9%, marking the highest growth rate since Q4 2021.
This exceeded market expectations of 4.3% and marked a significant improvement from the 2.1% expansion witnessed in Q2. The advance estimate revealed a notable surge in consumer spending, rising by 4%, a substantial increase from the 0.8% reported in Q2 2023. This growth was primarily driven by increased expenditures in housing and utilities, healthcare, financial services and insurance, food services and accommodations, as well as nondurable goods, with prescription drugs leading the category, along with recreational goods and vehicles.
Exports experienced a notable rebound, surging by 6.2% after a 9.3% decline in Q2, while imports also saw an increase of 5.7%, contrasting with the previous quarter's -7.6%. Private inventories contributed significantly to the overall growth, adding 1.32 percentage points, marking the first positive contribution in three quarters. Additionally, residential investment saw a positive upturn for the first time in nearly two years, posting a 3.9% increase compared to the previous quarter's -2.2%. Government spending exhibited accelerated growth at 4.6%, outpacing the 3.3% reported in the previous quarter.
Conversely, nonresidential investment contracted for the first time in two years, showing a decline of -0.1% compared to the 7.4% growth in the previous quarter. This contraction was attributed to a 3.8% decrease in equipment (compared to a 7.7% increase) and a slowdown in structures, growing at a rate of 1.6% compared to the previous quarter's 16.1%.
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