According to the Commerce Department reports, the US economy expanded at a rate of 2.6 percent during the 3rd quarter of the year 2022. This is in contrast to declines in GDP figures. The decline was 1.6 percent in the first quarter, and 0.6 percent in the second quarter. This also keeps that the Biden White House from having to acknowledge that the country is currently in the midst of a recession.
Consumer spending, which accounts for about 70% of U.S. economic activity, expanded at a 1.4% annual pace in the July-September quarter, down from a 2% rate from April through June. Last quarter’s growth also got a big boost from exports, which shot up at an annual pace of 14.4%. Government spending also helped: It rose at a 2.4% annual pace, the first such increase since early last year, with sharply higher defense spending leading the way.
Housing investment, though, plunged at a 26% annual pace, hammered by surging mortgage rates as the Federal Reserve aggressively raises borrowing costs to combat chronic inflation. It was the sixth straight quarterly drop in residential investment.
Although the Biden White House will probably be proudly announcing these numbers, they're not positive. The consumer spending is declining. The housing investment has dropped. In particular, government spending, in the defense industry, was the primary driver in the growth. One has to think that the mentions and weapons made to Ukraine and NATO partners to help fill in equipment shortages caused through the transfer of older weapons to Ukraine could be the cause of the rise in exports.
“Far from an indicator of growth, today’s GDP report signals decline. Consumer spending and business investment combined actually contributed -0.62 percentage points to GDP,” EJ Antoni, a research fellow for regional economics in the Center for Data Analysis at The Heritage Foundation, told The Daily Signal in a statement. (The Daily Signal is Heritage’s multimedia news organization.)
“Americans are steadily becoming poorer under Biden and in the third quarter were able to afford fewer imports from abroad,” he said.
This report brings the Biden White House out of a challenging reality, but it will be back with full force in the GDP report to come in.