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Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
The U.S. economy rebounded over the summer after shrinking for the first six months of the year, but the rebound does little to allay fears that the world’s largest economy is headed toward a recession as it confronts painfully high inflation and rising interest rates.
Gross domestic product, the broadest measure of goods and services produced across the economy, grew by 2.6% on an annualized basis in the three-month period from July through September, the Commerce Department said in its first reading of the data Thursday.
Refinitiv economists expected the report to show the economy had expanded by 2.4%.
The turnaround stemmed in large part from a narrowing trade deficit and increased exports, volatile measurements that do not accurately capture the underlying health of the economy. Economists think the surge in exports is just a one-off that masks weakening in the economy.
What’s more, the underbelly of the report pointed to some worrisome signs: Consumer spending – which accounts for about two-thirds of GDP – rose just 1.4% in the third quarter, a deceleration from the previous quarter.
“The U.S. is not currently in recession, given the strength of the consumer sector,” said Jeffrey Roach, chief economist at LPL Financial. “However, excluding the more volatile categories, the trajectory for growth looks weak. A deteriorating housing market, nagging inflation, and an aggressive Federal Reserve puts the economy on unsure footing for 2023.”
