Tuesday, April 22, 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

Netflix’s Revenue Jumps 13% in Q1, Driven by Price Hikes and Ad Growth

Netflix's Q1 revenue hit $10.54B, beating estimates, driven by subscriber growth and ad revenue, with a focus on innovative advertising tech.

Eli Lilly’s Stock Rockets 14% as Dow Declines for Third Straight Session

U.S. stock market ends mixed ahead of Easter, with Eli Lilly soaring while Nvidia and UnitedHealth decline amid trade tensions.

WTI Jumps 3.5% as U.S. Sanctions on Chinese Refiners Tighten Supply

Oil prices surged as U.S. sanctions on Chinese firms raise supply concerns, pushing Brent and WTI prices higher ahead of Easter.

Foldable iPhone Incoming: 7.76-Inch Display, Samsung Panel, $2K+ Price

Apple is rumored to launch a foldable iPhone next year, priced between $2100-$2300, exceeding Samsung's foldable models.

Oil Prices Jump Nearly 2% After U.S. Sanctions Chinese Refineries

Oil prices surged over 1.8% amid supply concerns after U.S. sanctions on Chinese refineries importing Iranian oil.

Topics

Netflix’s Revenue Jumps 13% in Q1, Driven by Price Hikes and Ad Growth

Netflix's Q1 revenue hit $10.54B, beating estimates, driven by subscriber growth and ad revenue, with a focus on innovative advertising tech.

Eli Lilly’s Stock Rockets 14% as Dow Declines for Third Straight Session

U.S. stock market ends mixed ahead of Easter, with Eli Lilly soaring while Nvidia and UnitedHealth decline amid trade tensions.

WTI Jumps 3.5% as U.S. Sanctions on Chinese Refiners Tighten Supply

Oil prices surged as U.S. sanctions on Chinese firms raise supply concerns, pushing Brent and WTI prices higher ahead of Easter.

Foldable iPhone Incoming: 7.76-Inch Display, Samsung Panel, $2K+ Price

Apple is rumored to launch a foldable iPhone next year, priced between $2100-$2300, exceeding Samsung's foldable models.

Oil Prices Jump Nearly 2% After U.S. Sanctions Chinese Refineries

Oil prices surged over 1.8% amid supply concerns after U.S. sanctions on Chinese refineries importing Iranian oil.

Semiconductor Rout Sends Nasdaq Down 3%, S&P Falls 2.2%

The New York stock market plunged due to semiconductor export regulations and stagflation concerns, impacting major tech stocks.

‘Buy British’ Is Trending Again—Here’s What’s Driving It

A survey shows 71% of Britons support buying local products amid concerns over U.S. tariffs and rising living costs.

Markets Wobble After Three-Day Rally—Boeing Tumbles, Tesla Shrugs Off Chart Alarm

U.S. stock indices fell as concerns over Trump's tariffs lingered, while Tesla and Nvidia showed resilience despite market declines.

Related Articles