The US economy, which is considered the world’s largest, showed faster growth than expected in the third quarter, with GDP increasing to 5.2% year-on-year.
In the third quarter, the US economy grew faster than initially expected as businesses built more warehouses and increased machinery.
At the same time, the agency notes, in terms of income, economic activity has been growing at a slow pace throughout the year.
The US gross domestic product grew by 5.2% year-on-year last quarter. Earlier, the Bureau of Economic Analysis predicted that this figure would reach 4.9%, and economists did not give forecasts above 5.0%.
This development reflected an increase in investment in the development of business infrastructure and medical facilities. Investment in residential construction also increased, driven by single-family home projects, helping to end the nine-quarter decline in this area. In addition, private investment in inventories was higher than previously expected.
However, the growth in consumer spending, which accounts for more than two-thirds of US economic activity, showed a lower level of 3.6%.
As reported, over the past two decades, the United States economy has accounted for more than 20% of global GDP growth. According to the latest IMF data, the US economy – unlike other major economies in the world – has recovered to pre-pandemic levels and continues to grow.
Another important component of the rapid recovery is the decisive actions of the US government. This time, the direct monetary assistance, as well as the support with political decisions on taxes, was much stronger than in any previous crisis. This did a very good job of limiting the damage to the economic system and allowed for a quick recovery.
The Federal Reserve has sharply cut interest rates and does not plan to raise them again until 2024. This time, the US Congress quickly approved payments to stimulate businesses and increased unemployment benefits. The fiscal response to the pandemic will amount to USD 5.1 trillion. For comparison, after the global crisis of 2007-09, which began in the United States, the stimulus amounted to 1.8 trillion dollars.
What is the overall result? On average, household incomes have actually increased. This is especially true for low-income families. For example, even unemployment benefits are now $300 higher than before. Salaries have also increased.