US Economic Growth Revised Upward, Exceeding Expectations

The US economy expanded at a faster-than-anticipated pace in the third quarter of 2024, fueled by robust consumer spending and a surge in exports, Bloomberg reports, citing revised data released Thursday by the Bureau of Economic Analysis (BEA).

The BEA’s third estimate of third-quarter GDP growth showed a 3.1% annualized rate of increase, significantly higher than the previous estimate of 2.8%. This upward revision was primarily driven by stronger-than-expected consumer spending, which reached a 3.7% annualized rate – the fastest since early 2023 – boosted by increased spending on services.

Exports also contributed significantly to the growth revision, expanding by 9.6% in the July-to-September period, up from the previous estimate of 7.5%. This increase was entirely attributable to services exports.

The revised figures paint a picture of continued economic resilience, defying predictions of a near-term slowdown. The report comes on the heels of Wednesday’s Federal Reserve announcement signaling a potential slowdown in interest rate cuts in 2025, a decision partly based on recent robust economic data, which triggered a stock market sell-off.

Further supporting the picture of a strong economy, the BEA also revised upward other key components of GDP, including business and residential investment and government spending.

The report also included a slight upward revision to the personal consumption expenditures (PCE) price index excluding food and energy, a key inflation metric favored by the Federal Reserve. The index now stands at 2.2%. November PCE data is expected Friday.

In separate data released Thursday, applications for US unemployment benefits fell last week after a holiday-related spike, indicating continued strength in the labor market.