The U.S. economy grew at a healthy 2.8% annual rate from July through September, with consumers helping drive growth despite the weight of still-high interest rates.
Wednesday’s report from the Commerce Department said the gross domestic product—the economy’s total output of goods and services—did slow slightly from its 3% growth rate in the April-June quarter. But the latest figures still reflect surprising durability just as Americans assess the state of the economy in the final stretch of the presidential race.
Consumer spending, which accounts for about 70% of U.S. economic activity, accelerated to a 3.7% annual pace last quarter, up from 2.8% in the April-June period. Exports also contributed to the third quarter’s growth, increasing at an 8.9% pace.
On the other hand, growth in business investment slowed sharply last quarter on a drop in investment in housing and in nonresidential buildings such as offices and warehouses. But spending on equipment surged.
The report is the first of three estimates the government will make of GDP growth for the third quarter of the year. The U.S. economy has continued to expand in the face of the much higher borrowing rates the Federal Reserve imposed in 2022 and 2023 in its drive to curb inflation. Despite widespread predictions that the economy would succumb to a recession, it has kept growing, with employers still hiring and consumers still spending.
