Tuesday, July 1, 2025

Strong Consumer Spending Fuels U.S. GDP Growth Despite Predictions

U.S. Department of Commerce

On Wednesday, the U.S. Department of Commerce announced that the preliminary GDP growth rate for the third quarter of 2023 was 2.8% (annualized rate compared to the previous quarter). This shows that the U.S. economy has maintained robust growth of about 3%, supported by strong consumer spending.

However, the released growth rate of 3.1% fell short of market expectations and was lower than the 3.0% growth rate recorded in the second quarter.

Nevertheless, a growth rate in the high 2% range significantly exceeds the estimated potential growth rate of the U.S., which is thought to be in the lower 1% range.

Specifically, personal consumption growth surged by 3.7% in the third quarter, driving economic growth. Personal consumption contributed 2.46 percentage points to the overall growth rate, accounting for the majority of the total growth. This highlights the resilience of U.S. consumer spending despite expert predictions of a slowdown due to prolonged high interest rates and deteriorating employment conditions.

Private consumption (final sales to domestic private consumers) rose by 3.2%, reflecting the underlying trend of U.S. economic demand.

The growth rate of the Personal Consumption Expenditures (PCE) price index decreased from 2.5% in the previous quarter to 1.5% this quarter, falling below the Federal Reserve’s inflation target of 2%. Excluding food and energy, the core PCE price index also declined from 2.8% to 2.2% during the same period, approaching the inflation target. The PCE price index is a key inflation indicator the Federal Reserve considers when making monetary policy decisions.

Hot this week

With 95% AI Accelerator Market Share, Nvidia’s Growth Story Isn’t Over

Nvidia's stock surges past $3.8 trillion market value, poised to become the first company to reach $4 trillion amid strong AI market dominance.

Trump’s Trade Tactics: Letters to All Nations on Tariffs

Trump plans to end the grace period for tariffs, sending letters outlining trade deficits and imposing tariffs on imports.

Sami Sheen Says She’s Removing Implants After Health Scare

Sami Sheen, daughter of Charlie Sheen, reveals health issues after breast surgery and plans to remove implants for recovery.

U.S. Growth Slows, Pressure Builds on Fed to Act

Expectations rise for a Fed interest rate cut amid worsening labor market signs and increased unemployment claims.

Dow Dips, Nasdaq Gains as Wall Street Awaits Fed’s Next Move

The New York stock market closed mixed, with Nvidia hitting a record high while Tesla faced declining sales in Europe.

Topics

With 95% AI Accelerator Market Share, Nvidia’s Growth Story Isn’t Over

Nvidia's stock surges past $3.8 trillion market value, poised to become the first company to reach $4 trillion amid strong AI market dominance.

Trump’s Trade Tactics: Letters to All Nations on Tariffs

Trump plans to end the grace period for tariffs, sending letters outlining trade deficits and imposing tariffs on imports.

Sami Sheen Says She’s Removing Implants After Health Scare

Sami Sheen, daughter of Charlie Sheen, reveals health issues after breast surgery and plans to remove implants for recovery.

U.S. Growth Slows, Pressure Builds on Fed to Act

Expectations rise for a Fed interest rate cut amid worsening labor market signs and increased unemployment claims.

Dow Dips, Nasdaq Gains as Wall Street Awaits Fed’s Next Move

The New York stock market closed mixed, with Nvidia hitting a record high while Tesla faced declining sales in Europe.

Nvidia Stock Pops Past $150, Beating Microsoft in Market Value

Nvidia's stock rose to 152.36 USD amid concerns over export restrictions to China, surpassing Microsoft’s market cap.

Nvidia Soars Despite CEO Share Sale, Tesla Tanks on Robotaxi Trouble

The New York stock market rises as Dow surpasses 43,000, Nvidia gains despite CEO stock sale, while Tesla and defense stocks decline.

Gold Prices Plunge as Iran and Israel Call for Ceasefire

Gold prices fell as geopolitical tensions eased between Israel and Iran, with analysts predicting potential future increases.

Related Articles