For the third consecutive quarter, the Gross Domestic Product (GDP) grew 2.6% which would remove the fears that have arisen for weeks that the economy in the United States is in a recession, after two consecutive reports of decrease
The data was confirmed by the Bureau of Economic Analysis (BEA) in its report this Thursday, in which it confirmed the growth of the national economy despite the fact that it is an advanced figure that requires a review on November 30.
According to the consensus among several economists around the world, an economy is in a technical recession, when its GDP falls in at least two consecutive quarters, so the data published this morning would give some relief to the fears of the markets.
The BEA report for the first quarter confirmed a drop of 1.6% in the first quarter of this year and, at the end of last August, the office confirmed that GDP had fallen 0.6% during the second quarter, which would then have met the technical rule for a recession.
During the third quarter of the year, GDP was buoyed by increases in exports, consumer spending, nonresidential fixed investment, federal government, and state and local government spending, according to the BEA report.
Until now, the federal government has avoided ruling on a recession, even in its technical definition, despite the fact that there are already two data that would have confirmed it; notwithstanding that the preliminary one, that of the third quarter of the year, shows a positive performance.
The GDP data is published a few weeks after the Bureau of Labor Statistics announced that inflation stood at 8.2% during September past in its year-on-year comparison.
Data for the third quarter of the year gave some relief to the alerts in the markets and investors who did not see the Fed’s actions to control price escalation as having positive effects.
For his part, Fed Chairman Jerome Powell changed his speech during the last meeting of the board in which he announced a new adjustment of 0.75% to the key rate and acknowledged that controlling inflation is the most important thing, even if that means leading the economy into a recession.
Powell warned against the so-called soft landing and hinted that key rate hikes as a measure to cool the economy will continue for the rest of the year.
For now, reports from institutions such as Bank of American indicate that there are still no significant changes in consumption, despite the fact that some sectors of the population such as Latinos in the country have opted to be more cautious in their spending ahead of the Christmas season and New Year’s shopping.