Economy Shows Huge Growth in Third Quarter As Fed Struggles to Rein In Inflation

The U.S. economy grew at a rate of 4.9% in the third quarter of 2023, according to Gross Domestic Product (GDP) statistics released by the Bureau of Economic Analysis (BEA) on Thursday morning.

In the second quarter of 2023, real GDP rose 2.1% after being revised down from an initial estimate of 2.4%. Economists expected that GDP would be around 4.7% for the third quarter of 2023, far higher than the 2% to 3% that is common for the U.S.

“Several factors appear to be driving the number up last quarter,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the 🏢Daily Caller News Foundation. “Businesses built up inventories, government spending has simply exploded, and consumers have been depleting savings and going into debt to fuel spending growth. Imports falling faster than exports is also likely behind the contribution of net exports to the increase in GDP. Unfortunately, none of these things represent sustainable growth. Fixed private investment likely underperformed again, which indicates these growth rates are not sustainable. If the last couple of years are any indication, odds are this quarter will be revised down in the future.”

The GDP announcement comes less than a week before the Federal Reserve’s next Federal Open Market Committee, where it will be decided whether to raise the Fed’s federal funds rate another 0.25%. The Fed has set the