A little bit of good news??? Maybe??
Despite high interest rates and chronic inflation, the U.S. economy grew at a 2.9% annual rate from July through September, the government said Wednesday in an upgrade from its initial estimate.
Last quarter’s rise in the U.S. gross domestic product (the economy’s total output of goods and services) followed two straight quarters of contraction. That previous decline in output had raised fears the economy might have slipped into a recession in the first half of the year despite a still-robust job market and steady consumer spending.
Since then, however, most signs have pointed to a resilient if slow-moving economy, led by steady hiring, plentiful job openings and low unemployment. Wednesday’s government report showed that the restoration of growth in the July-September period was led by solid gains in exports and consumer spending that was slightly stronger than originally reported. Consumer confidence has since taken a gloomy turn, however, falling in October for the second month in a row, the Conference Board reported Tuesday.
The latest estimate marked the second of three the Commerce Department will provide of economic expansion in the third quarter. In its initial estimate, the department had estimated that the economy grew at a 2.6% annual rate last quarter.
Huzzah! Right? No, of course not:
Economists expect the economy to eke out modest 1% annualized growth from October through December, according to a survey of forecasters conducted by the Federal Reserve Bank of Philadelphia. The nation’s manufacturing sector is slowing despite an easing of supply chains that had been backlogged since the economy began rebounding from the pandemic recession two years ago. And inflation is threatening to weaken the crucial holiday shopping period. Retailers say inflation-weary shoppers are shopping cautiously, with many holding out for the most attractive bargains.
That’s so weird. I have been reading this for the past several days:
Shoppers spent big over a record-breaking five-day holiday shopping weekend, shelling out more than ever on the year’s premier online shopping day.
Consumers spent $35.4 billion online over the five-day period, according to data from Adobe Analytics. On Cyber Monday — the biggest shopping day of the long weekend — sales hit a record $11.3 billion, a 5.3 percent jump from last year, while online Black Friday sales ticked up 2.3 percent to $9.12 billion.
U.S. shoppers also spent on Thanksgiving and the weekend, with sales hitting $5.3 billion on Thursday and a combined $9.6 billion on Saturday and Sunday.
The figures are not adjusted for inflation, which has been hovering at decades-high levels, experts note. That suggests consumers could be spending more for less.
“If inflation is up 8 percent and sales are up 5 percent or so, people are definitely buying less — there’s no question about that,” said Forrester analyst Sucharita Kodali. She cautioned that without in-person sales numbers, it’s hard to see a full picture.
Still, there’s some bright news for retailers. It seems more people are opening their wallets and searching for deals before peak gift-giving season hits.
A record 196.7 million people shopped over the weekend, according to the National Retail Federation. That “shattered expectations by more than 30 million,” according to the trade group’s president and chief executive, Matthew Shay.
I guess that’s bad. But the last we heard (about 3 weeks ago) inflation was easing too. We’ll see how it goes. But I have always observed that it takes months to wring gloom and doom out of the reporting on the economy and as a result people say it’s getting worse even if it’s getting better.