US economy grows by 3.4% in third quarter, surpassing expectations

The U.S. economy grew by 3.4 percent in the third quarter of the year, surpassing expectations. Washington, October 29 (KUNA) -- Data released by the U.S. Department of Commerce on Thursday showed that the U.S. economy expanded by 3.4 percent in the third quarter of this year, a faster rate than anticipated. According to the bureau’s regular report, the figure represents, in preliminary estimates, the “annualized growth rate of real gross domestic product,” compared with a 2.2 percent expansion in the second quarter. The report noted that growth in the third quarter was driven by “increases in investment, consumer spending, and government spending, which were partially offset by a decline in exports. Imports, which are subtracted in the calculation of GDP, rose.” In a separate report, the bureau indicated that inflation continued to exceed the Federal Reserve’s (the U.S. central bank) 2 percent target in September, with the overall rate reaching 3.6 percent, while core inflation stood at 3.1 percent according to one of the most prominent measures used to calculate inflation in the United States. It noted that consumer spending was slightly below expectations, despite posting 0.5 percent growth, while personal income rose by just 0.2 percent. Excluding food and energy, the core personal consumption expenditures (PCE) price index rose 0.3 percent month-over-month and 3.1 percent year-over-year, figures in line with expectations. Although the Federal Reserve closely monitors both indicators, its officials often regard the core measure as more accurate for identifying long-term inflation trends. The report came a day after the Federal Reserve’s decision to keep its key interest rate within a range of 3.75 percent to 4 percent. Despite rising inflation rates, Federal Reserve Chair Jerome Powell, following the announcement of the decision, stated that “the coming period is full of information; there is a lot happening in the world, and my colleagues and I are keen to monitor these developments.” Coinciding with the two reports, the Department of Labor released data indicating that jobless claims remain low, with initial claims for unemployment insurance benefits, after seasonal adjustment, falling to 194,000 for the week ending October 24, a figure below the expected 200,000 and approaching levels not seen since the late 1960s. It is worth noting that employment data and labor market strength constitute the second most prominent benchmark for measuring inflation, alongside the consumer price index. (End) R.S.R./A.M.S.