A preliminary reading of gross home product in the 3rd 4th showed that the US economy grew annually, taking inflation into account, at a rate of 4.3%, much faster than the 3.8% recorded in the second quarter, according to the Department of Commerce data published on Tuesday. It's the fastest growth rate in 2 years.
The main factors affecting GDP in the 3rd 4th were the acceleration of consumer spending, which increased by 3.5% from 2.5% in the second quarter, and exports which increased by 8.8% from -1.8% in the second quarter.
Federal spending besides played a crucial role, reflecting a crucial increase in defence spending as well as severance for national workers, which is part of efforts to yet reduce government spending. However, the GDP study for the 4th fourth to be published next period is expected to negatively affect the fall in national spending resulting from the 43-day suspension of government activities.
Although Trump has repeatedly pressed the national Reserve, to lower interest rates In order to stimulate the economy, the Tuesday study is likely to give the central bank even less reasons to lower its rates erstwhile it regroups next month.
Mixed economical image
The GDP study resembles a look at the economy from a bird's eye. From this perspective, the economy seems to be on solid foundations. However, a closer look reveals a little optimistic picture.
"The K-shaped economy looks us right in the face," said James Knightley, chief economist for global affairs in ING, on Tuesday after the GDP study was published. He added that economical growth "concentrates among households with higher incomes and technological investments, while overall consumer assurance remains under pressure".
Less than 2 hours after the publication of the GDP report, Conference Board reported that consumer assurance declined importantly this month, by 3.8 points compared to November. The December reading at 89.1 was lowest since April, erstwhile Trump introduced duties on the occasion of the "Day of Liberation". The study showed that for the first time in almost 4 years, consumers' opinions on the current financial situation of their families deteriorated negatively.
Consumers at all income levels have besides expressed greater concern about the labour marketplace and unemployment rate reached recently the highest level in 4 years. The percent of people who found jobs to be in abundance has fallen to the lowest level in 4 years. At the same time, for the first time since September 2024, companies reported a negative economical balance sheet.
