U.S. third-quarter GDP growth revised upward to 5.2%, surpassing initial estimate of 4.9%. Corporate profits increase by 4.3% while consumer spending revised lower. The Commerce Department reported the increase, driven by business investment in warehouses and equipment but countered by a slowdown due to higher borrowing costs. Economists suggest that despite robust numbers, the economy might be cooling. However, this expansion is among the seven fastest ever recorded.
Retail sales took a slight dip in the first month of the fourth quarter, and a slowdown was observed in the labor market. Despite slower growth in consumer spending, the Federal Reserve may pause its cycle of interest rate hikes given the slowing demand. The report also highlights that inflation is trending lower, reducing pressure for the Fed to hike interest rates.
The strong growth figures have instilled optimism in the economy as the gross domestic income increased at a 1.5% rate last quarter. This news is a stark contrast to fears that the economy would potentially dip into a recession by late 2022.