Hot GDP print does not mean US economy is out of the woods
The US economy grew at its fastest pace in nearly two years during the past three months as consumers stepped up their spending despite a high interest rate environment.
But the surge in activity does not necessarily mean the economy is reaccelerating, according to economists.
“The 4.9% annualized jump in GDP in the third quarter and the strength of the monthly data through September means it is now unlikely a recession begins before year end, as we have in our baseline,” wrote Oxford Economics lead US economist Michael Pearce. “However, much of that strength was driven by a sharp fall in the saving rate, a strong rise in government spending and a jump in inventory accumulation, all of which won’t be sustained.”
“There are also signs that monetary tightening is weighing on investment spending and with financial conditions still…
