October 30, 2024
GDP keeps growing! Let’s just keep that train rolling.
I told you in that video back in July the US economy in the second quarter was super strong. And today – the third quarter numbers just came in and you guessed it – they’re strong again.
People are spending. Inflation is cooling. And the third quarter GDP expanded at a 2.8% annual rate. This is just below the 3% growth last quarter and just continuing the growth we keep seeing quarter after quarter.
Now – I know lots of you are going to say these numbers aren’t real. These numbers don’t reflect what you feel in your everyday life. And those are valid feelings. It’s true lots of Americans feel that way. You aren’t alone. But regardless of how you feel – these numbers are used to determine America’s economic strength on the world stage – by the way – we are, far and away the country with the largest GDP – and these numbers are used by the Federal Reserve to determine when to increase and decrease interest rates. So you might want to pay attention to them too.
So what is GDP? The Gross Domestic Product measures the total value of goods produced and services provided in a country during a single year.
Ok – today’s report from the Bureau of Economic Analysis – as I said – GDP increase 2.8% year over year for the months of July, August and September.
Here’s what that looks like when you look at GDP every quarter going back to 2006. Here’s the third quarter of this year. This is the 3% growth from the 2nd quarter. This is the recession in 2008. This is the recession during covid. And this is the dramatic spike in GDP during the covid recovery. And the strong GDP growth ever since except for this slight dip in this first quarter of 2022.
So what is contributing to the third quarter GDP growth?
The report says consumer spending is number one. It grew 3.7%. And the report says people are able to spend because of increasing wages, low unemployment and inflation cooling off. The report found for the third quarter consumer prices were up 2.3% from last year – which is thiiiiis close to the fed’s 2% inflation goal. The report said people were spending on prescription drugs and purchasing cars and car parts but also spending on outpatient services, food services and accommodations. Business investments and government spending were also very strong in Q3.
But the report says we are starting to see slows downs in business spending on things like new buildings and in people buying homes.
Now we will get to see what the federal reserve thinks of all this and whether they will cut interest rates again when they meet next week the day after the election.
Read the 3rd Quarter GDP report.
