A delayed report on Tuesday indicated that the U.S. economy expanded at a faster-than-anticipated rate in the third quarter, which was fueled by robust consumer expenditure.
The Commerce Department reported in its initial reading of third-quarter growth that U.S. gross domestic product, or the total of all goods and services made in the massive U.S. economy, grew by 4.3 percent in the July-September quarter.
In the third quarter, consumer spending grew by 3.5 percent following an increase of 2.5 percent in the second quarter. Growth was also spurred by increases in exports and government spending, and a less pronounced decline in private fixed investment was also helpful.
The report had been initially planned to be released on October 30, but was postponed due to the government shutdown. This discharge also substitutes a second estimate, which was to fall on November 26. The department’s Bureau of Economic Analysis intended to release one final estimate later.
However, an indicator of growth known as real final sales to private domestic buyers increased by 3 percent in the quarter, compared to an increase of 0.1 percentage point in the previous period.
Therefore, the Federal Reserve policymakers are closely monitoring the data point to indicate consumer demand. The economy continued to advance through the period despite the continued pressures of inflation.
The Fed’s main inflationary measure, the personal consumption expenditures price index, increased 2.8 percent in the period, and 2.9 percent in core, excluding food and energy.
Both were over previous readings of 2.1 percent and 2.6 percent, and are still high compared to the 2 percent inflation gauge of the Fed.
The chain-weighted price index, which considers any behaviors of consumers like switching to cheaper products in place of more expensive products, also increased by 3.8 percent, a whole percentage point higher than projections.
The report provided an overall positive picture of the economy, but the markets did not respond much as the report is backward-looking. The stock futures were at a slight negative, and Treasury yields were at a higher position.
In other parts of the report, corporate profits increased by 4.2 percent, including $166.1 billion compared to a gain of only 6.8 the previous quarter.
