The US economy went back to growing in the third quarter of 2022, making an imminent recession less likely

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People shop for bread at a supermarket in Monterey Park, California on October 19, 2022.
  • US gross home product grew at an annualized price of 2.6% in the third quarter of 2022.
  • That beats the 2.4% progress estimate. 
  • The advance estimate suggests the US economy is growing once more after shrinking in the first two quarters of 2022.

Americans fearing a looming recession can breathe a bit of simpler.

The economy’s gross home product grew at an annualized price of 2.6% in the third quarter of 2022, in accordance to a Thursday report from the Bureau of Economic Analysis. That advance estimate is above the median estimate from economists surveyed by Bloomberg of 2.4%.

That comes after the US economy shrank by 0.6% and 1.6% in the second quarter and first quarter of the 12 months respectively.

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“The third quarter data is likely to look something like a normal healthy economy,” Dean Baker, senior economist at the Center for Economic and Policy Research, wrote forward of the advance estimate for the third quarter. “We should be past the big swings in net exports and inventories that drove the economy in prior quarters. We also should see a modest positive growth rate after two quarters of negative growth.”

Prior to Thursday’s information launch, David Kelly, chief international strategist at JPMorgan Asset Management, additionally famous the estimate might be sturdy. Kelly mentioned in a word that “this week’s GDP report could show surprising strength, especially following two negative quarters and numerous predictions of imminent recession.” 

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However, Kelly additionally wrote that the robust third quarter doesn’t suggest the US economy is out of the woods but.

“Going forward, growth could well turn negative in the fourth quarter and will likely be very weak over the next year until housing starts bottom and the trade and budget deficits hit a trough as a share of GDP, likely sometime in the middle of 2023,” Kelly said. “Thereafter, slightly stronger economic growth could emerge.”

Today’s report is a few excellent news for Americans anxious about layoffs and different results from a US recession as the return to optimistic GDP progress suggests {that a} downturn is not right here but. Inflation remains to be excessive although, with the core Consumer Price Index at a 40-year high. Consumer confidence additionally declined in October per the Conference Board.

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“In principle, this is the sort of GDP report we should be happy to see at this point in a recovery,” Baker mentioned forward of the launch. “However, with the Fed continuing to hike rates, and most of the impact of past rate hikes yet to be felt, this could be the last good report we see for a while.”

This is a growing story. Please verify back for updates.

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