The US Economy Expects Growth (GDP) In The Last Quarter (Q3)
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The American economy, like many others in the world, is struggling with serious economic problems. The threat of recession also appears from the perspective of the world's largest economy. To find out the scope and scale of the problem, you should take a look at the gross domestic product (GDP).
On Thursday, will be review of the results for the value added created through the production of goods and services in a country during the last quarter (Q3).
Real GDP
The U.S. economy is expected to grow from the first half of the year, but most Americans are unlikely to notice anything. This time it is expected to break above zero and hit 2.1%.The latest US GDP figures are likely to be supported by a narrowing trade gap as the US imports fewer goods as demand slows down. Although the newest numbers are likely to look like improvements on paper, economists say they don’t reflect major changes in the economy.
America’s return to growth stands in sharp contrast to other major economies, including Europe and the United Kingdom, which are either already in recession or almost.
We can expect that along with strong GDP results, the strength of the dollar (USD) will also increase. This is because high GDP reflects a higher pace of production, indicating a greater demand for the country's products. Increased demand for a country's goods and services often translates into increased demand for the domestic currency. The appreciating dollar will affect the rates of the main currency pairs, and thus the next hawkish actions of central banks.
Previous data
Real gross domestic product (GDP) fell by 0.6%. annually in the second quarter of 2022, after a decrease of 1.6%. in the first quarter. The decline in the second quarter was the same as previously estimated in the "second" estimate published in August. The decline in real GDP reflected declines in private inventory investment, fixed housing investment, federal government spending, and state and local government spending, which were partially offset by increases in exports and consumer spending. Import increased, which is a subtraction in the GDP calculation (Table 2).
The decline in private stock investment was due to a decline in retail trade (mainly "other" grocery stores). The decline in fixed residential investment was due to a decline in 'other' structures (in particular real estate brokers' commissions).
Economists and data
Many economists say a recession in 2023 is almost inevitable as the Federal Reserve continues to aggressively raise interest rates in hopes of slowing the economy enough to control inflation.
But for now, the economy remains strong in many ways. Unemployment, at 3.5 percent, many Americans are receiving increases, and corporate investment and consumer spending remain high.
On the one hand, good data, on the other hand, of the Fed's actions and the opinions of economists do not give any credible outlook for the future. Therefore, it is necessary to observe changes in the monetary policy and their impact on the key indicators of the country.
GDP Price Index
On the same day, the GDP Price Index will be published along with the real gross domestic product (GDP).
Although the US economy recorded strong growth in GDP Price Index in the first half, it is expected that in the third quarter the reading will be much lower than recently. The expected level is 5.3% against the previous 9.1%. Persistent inflation continues to weigh heavily on both economic growth and household budgets.
Source: investing.com
The GDP Price Index measures changes in the prices of goods and services produced in the United States, including those exported to other countries.
Source: bea.gov, Investing.com
