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US economy continues to expand

The US economy keeps surprising with its strength! In fact, it is inspiring both analysts and market players. According to estimates from the US Department of Commerce, in the third quarter of 2024, the country's economy grew by 2.8% year-over-year. The department highlighted that the expansion could be explained by rising consumer spending and a boost in exports.

Earlier, the Commerce Department noted that from April to July 2024, US GDP growth had slowed a bit, dipping from the previous 3%. Nevertheless, according to the current report, the world’s largest economy is showing remarkable resilience. Its growth exceeded 2% in eight of the last nine quarters.

Consumer spending, which accounts for about 70% of US economic activity, accelerated to 3.5% year-over-year in the third quarter. Previously, from April to June of this year, it had been 2.8%. Additionally, analysts recorded the fastest economic growth since the first quarter of 2023. Exports also contributed to the economic improvement, rising by 7.5%. Experts emphasize that this is the highest figure in the past two years. However, both consumer spending and exports in the third quarter of 2024 were lower than the initial estimates of the US Commerce Department.

At the same time, the department pointed out a decline in business investments, partly due to funds flowing into real estate. On the other hand, spending on equipment saw a sharp rise, the financial institution noted. This report is the second estimate of US GDP growth, with the final release scheduled for December 19.

In a separate document, it was reported that the Personal Consumption Expenditures (PCE) Index, which is the Federal Reserve's preferred inflation indicator, increased by only 1.5% year-over-year. This is lower than the previous 2.5% recorded in the second quarter of 2024. This indicator was calculated excluding the volatile prices of food and energy. As a result, core PCE inflation came in at 2.1%, down from the previous 2.8%, analysts added.

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