12/22/2022
The rise in gross domestic product — the economy’s output in goods and services — marked a return to growth after consecutive drops in the January-March and April-June periods.
Still, many economists expect the economy to slow and probably slip into recession next year under the pressure of higher interest rates being engineered by the Federal Reserve to combat inflation that earlier this year reached heights not seen since the early 1980s.
Driving the third-quarter growth were strong exports and healthy consumer spending.
In its previous estimate of third-quarter growth, issued Nov. 30, the Commerce Department had pegged July-September growth at an annual rate of 2.9%. Behind the upgrade to Thursday’s 3.2% was stronger growth in consumer spending, revised up to a 2.3% annual rate from 1.7% in the November estimate.
“Despite a rapid increase in interest rates, the economy is growing and importantly, households are still spending,″ Rubeela Farooqi, chief U.S. economist at High Frequency Economics, said in a research note. “However, looking ahead, in 2023, we expect a slower growth trajectory.″
Inflation, which had not been a serious problem for four decades, returned in the spring of 2021. It was set off by an unexpectedly strong recovery from the coronavirus recession of 2020, fueled by massive government stimulus.
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