According to data provided by the Commerce Department, the US economy grew 2.8% during Q3, beneath expectations of a 3.1% increase. GDP has slowed from the 3% posting during Q2.
Personal consumption expenditures (PCE) rose 3.7% last quarter, marking the strongest performance since Q1 of 2023. The US federal government’s spending is factored into growth, albeit another reason why these data points never provide a true indicator of economic growth in the long term. The government managed to increase spending by an astounding 9.7% — 14.9% of which was spent on defense.
Personal consumption expenditures price index increased 1.5%, providing a bit of good news for Fed who looks and causing optimism about a rate drop during the next Federal Open Market Committee meeting. Core PCE remained at 2.2%.
Consumer spending, one-third of US GDP, has risen, but Americans are spending more on less. The government is not releasing the true figures or painting an accurate picture of the economy. Sure, consumer spending is up, but personal savings fell to 4.8% from 5.2%. Americans are spending more, but they are also falling into debt.
The US remains the safe haven for international capital. We saw a 5.87% increase in capital flows to the US on a monthly basis based on the Global Market Watch, and Socrates predicts it will continue to increase.
