The U.S. economy grew at an annual rate of 2.6% during the July-September quarter, which was better than expected; the Dow Jones forecast was 2.3%, according to cnbc.com. It was the U.S. economy’s first period of growth for 2022.
The growth reportedly mainly resulted from a narrowing trade deficit, which economists consider a one-off occurrence that will not be present during future quarters. Increased consumer spending, nonresidential fixed investment and government spending also led to gains. The report showed services spending rose 2.8% and goods spending fell 1.2%. The Bureau of Economic Analysis said declines in residential fixed investment and private inventories offset the gains.
“Overall, while the 2.6% rebound in the third quarter more than reversed the decline in the first half of the year, we don’t expect this strength to be sustained,” wrote Paul Ashworth, chief North America economist at Capital Economics. “Exports will soon fade, and domestic demand is getting crushed under the weight of higher interest rates. We expect the economy to enter a mild recession in the first half of next year.”
