The United States economy expanded at an annual rate of 4.3% during the third quarter of 2023, marking its strongest growth in two years. This strong performance far surpassed analysts’ expectations, who had predicted a much lower growth rate of around 3.2%. The stunning numbers arrive against a backdrop of constant trade policy upheaval and an inflationary wave that has largely defined the economy over the past two years.
Consumer spending drove much of this growth, a sharp contrast to the grim post-pandemic climate. Even more impressive, it really roared back at an annualized rate of 3.5% in that span. Even more surprising, exports grew by a healthy 7.4%, adding to the strong economic growth. In contrast, imports declined, influenced by the taxes imposed on shipments entering the United States, a policy introduced by President Donald Trump earlier this spring.
Today’s good news on the government shutdown-induced delay of an especially dour economic report. At least its release should remind us that the US economy remains remarkably resilient, despite massive headwinds. The personal consumption expenditures price index reached new heights. It increased 2.8% in the third quarter, an improvement from 2.1% in the second quarter.
Those changes are not just superficial, and economists have noted radical shifts in the contours of the US economy. These are outlined as changes in trade and immigration policy, ongoing inflationary pressure, and government austerity. In spite of those things, analysts are cautiously hopeful about the possibility of growth, both now and moving forward.
Aditya Bhave, a senior economist at Bank of America, commented on the current economic climate:
“This is an economy that has defied doom and gloom expectations basically since the beginning of 2022.”
He went on to assure everyone about the permanence of this new growth path, claiming that,
“I don’t see why that wouldn’t continue going forward.”
Oliver Allen, senior US economist at Pantheon Macroeconomics, had some thoughts on the surprising economic showing. Oxford Economics US chief economist Michael Pearce expressed like mindedness in regard to what it means for coming quarters.