U.S. economy returned to growth last quarter despite surging inflation – By Aimee Picchi (Moneywatch) / Oct 27, 2022
The U.S. economy grew at a 2.6% annual rate from July through September, the government said Thursday — a strong rebound after the nation’s gross domestic product shrank in the first two quarters of the year.
The resurgence comes as consumers and businesses are grappling with searing inflation and as rising interest rates rapidly cool the housing market. And the outlook for the world economy grows bleaker the longer that Russia’s war against Ukraine drags on.
Economists had forecast the economy grew at a 2% annual rate in the third quarter, according to the data firm FactSet. The third-quarter GDP jump reverses annual declines of 1.6% from January through March and 0.6% from April through June.
In the short-term, the latest growth figures are likely to ease concerns that the U.S. is on the brink of a recession. But the stronger-than-expected economic activity last quarter raises the odds that the Federal Reserve will continue to aggressively drive up interest rates, which economists warn could trigger a recession.
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