Last Quarter Surge: The US Economy surges to 4.9%

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Last Quarter Surge The US Economy surges to 4.9
In defiance of the prediction of leading
financial analysts about recession, the US
economy, powered by the GDP, flourished to 4.9
in the last quarter (July to September). The
worlds biggest economy owes its promising
financial upsurge to propelling factors and is
successfully holding off prospects of a downturn.
This fast- paced growth marks the highest rise
since the last quarter of 2021. We delve into
the contributing factors and break them down to
gauge how economies prosper or fail in the
economic landscape.
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Gross Domestic Product rises from 2.1 to
4.9 GDP rose by about 133 this quarter from
2.1 in the previous quarter (April through
June).
Image Source https//www.bea.gov/news/2023/gross-
domestic-product-third-quarter-2023-advance-
estimate
Gross Domestic Product (GDP) can be formulated as
the cumulation of consumption, investments,
government spending, and the net export of a
country. GDP C I G (X
M) Implying private consumption gross
private investment government investment/
government spending (exports imports). For
the GDP to increase, the leading contributors
are the US consumers, whose spending accounts
for over 67 of the economy surged in the last
quarter. A tight labor market, despite slow wage
growth of about 1.7 in a quarter, favored
consumers to spend on various goods and
services. The interest rate hikes by the Federal
Reserve, keen on clamping down inflation, have
not stopped private consumption so far.
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As per the survey, some of the leading sectors
with the highest expenditure, are housing,
utilities including gas and groceries,
insurance, financial services, accommodation, food
recreational goods, vehicles, drugs, and more. T
his
services, helped
the personal consumption expenditures (PCE) price
index soar high to 2.9. With increased personal
expenses, personal saving was reported as 776.9
billion in the third quarter, when compared to
1.04 trillion in the second quarter of 2023. A
notable fact that must have propelled the economy
is loan repayments. During the pandemic, loan
repayments had been desisted, and October
witnessed over 30 million loan repayments. Intere
stingly, fresh home sales surged by 12.3, the
highest in the last 19 months. This element
affirms spending capacity of US consumers as
positive for GDP growth. To contribute towards
private investment, there has been improvement
in manufacturing and retail trade as per
government reports. Export and import are
important components driving the economy of a
nation. While exports rose by 6.2, imports
improved by 5.7. The federal government spends
increased in residential fixed investment,
further contributing to the boost. Though
several factors listed above supported the
country to outpace its revenue dips in the past,
this improvement is unlikely to impact the
governments monetary policies. Predictions for
the 4th quarter The US economy has been a
speculative topic and subject to deep analysis
by leading economic analysts. If we were to
believe few of them, consumers seem to have used
the last portion of their pandemic savings.
After this boost in GDP, they predict there will
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again be a downturn in the concluding quarter of
2023. The strikes by United Auto Workers against
the leading conglomerates Ford, Stellantis, and
General Motors can hamper the sustenance of the
economy to this level. The strike that ensued on
15th September against underpays and loss of
retirement benefits can hamper the automobile
manufacturing industry and impact GDP. Finally,
the gross national income restoration, is a
breath of fresh air for this thriving land of
opportunities, and citizens hope this hike stays
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