U.S. economic growth revised up to 3.1% in third quarter
Add Axios as your preferred source to
see more of our stories on Google.
The U.S. economy grew at a 3.1% annualized pace in the third quarter — stronger than previously thought, the Commerce Department said on Thursday.
Why it matters: The revision suggests 2024 was yet another shocker year in which the U.S. economy surprised to the upside, as other major nations grappled with sluggish growth.
By the numbers: The revision is an upgrade from the initial estimate of 2.8% growth in the July-Sept. period.
- It largely reflects stronger exports and better consumer spending, offsetting a bigger-than-estimated drag from inventory investment.
The intrigue: The third quarter grew at a slightly quicker pace than the prior quarter, which expanded at a 3% annualized rate.
- A tool developed by the Federal Reserve Bank of Atlanta estimates the economy might be even stronger in the current quarter, with 3.2% growth.
What to watch: The Fed cut borrowing costs for the third time on Wednesday, but signaled fewer cuts ahead in 2025. One reason: the economy is hanging on while progress on slowing inflation has come to a halt.
- "What we see happening in the economy again is most forecasters have been calling for a slowdown in growth for a very long time, and it keeps not happening," Federal Reserve chair Jerome Powell told reporters at a press conference on Wednesday.
The bottom line: President-elect Trump will inherit a strong economy. Still unclear is how his proposed policies on immigration, taxes and tariffs will shape growth in the months to come.
Go deeper: Democrats are gloomy about the economy, and Republicans are optimistic
