U.S. Q3 Growth At 2.8%...Drives Growth On Strong Consumption

The U.S. economy, which was expected to shrink due to prolonged high interest rates, continued to grow at nearly 3% in the third quarter based on solid domestic consumption.

The U.S. Commerce Department said the U.S. gross domestic product and GDP growth in the third quarter was 2.8% compared to the previous quarter.

Those figures are below the 3.1% expert forecast and down from 3% in the second quarter, but they are believed to have continued strong growth given the U.S. potential growth level, which is estimated to be in the late 1% range.

In particular, personal consumption growth, which had been expected to contract due to prolonged high interest rates and worsening employment conditions, was 3.7%, driving economic growth in the third quarter.

The growth rate of the "personal consumption expenditure" price index, a measure of inflation used by the U.S. Federal Reserve in monetary policy making, fell to 2.2% in the third quarter from 2.8% in the second quarter, close to its price target.

The growth rate, which is expected to slow down, will continue to be good through the third quarter, bolstering the analysis that the U.S. economy has succeeded in "no-landing," or no-landing, growing by lowering inflation.