U.S. economic growth accelerated in the third quarter reaching 2%
- According to the US Department of Commerce, economic growth showed a three point increase compared to the previous quarter.
The report shows that consumer spending, which in the U.S. is more than two-thirds of the gross domestic product (GDP) grew at a rate of 2.6 percent between July and September, the fastest since 2006.
The economy expanded 1.7 percent in the second quarter. The third quarter data revealed on Friday matched analyst expectations. “Growth is still positive, but it is a bit disappointing. It is not where we would like to be at this point in the recovery,” said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida.
The GDP report will not persuade Fed officials during their meeting on November 2 and 3 to announce a second round of buying assets to maintain low interest rates and strengthen recovery. However, these latest numbers surely will be part of the debate.
Some analysts expect the Fed to announce bond purchases of at least 100,000 million dollars a month to lower Treasury lending costs and encourage investment and companies hiring.
The economy is experiencing a slow recovery by historical standards, with an unemployment rate of 9.6 percent which makes Americans increasingly nervous when it comes to the future.
This should have a considerable impact in the legislative elections of November 2 and could change the country’s political spectrum, as opinion polls suggest that the ruling Democratic Party will lose significant representation in Congress.