First GDP Estimate for Third Quarter Isn't Terrible

The US economy grew at a 2.8% annual rate from July through September, a figure the AP calls "healthy" and CNBC calls "solid though slightly disappointing." Wednesday's report from the Commerce Department said the gross domestic product—the economy's total output of goods and services—did slow slightly from its 3% growth rate in the April-June quarter and was less than the 3.1% economists surveyed by Dow Jones expected. But the latest figures still reflect surprising durability just as Americans assess the state of the economy in the final stretch of the presidential race, per the AP. The report is the first of three estimates the government will make of GDP growth for the third quarter of the year.

Consumer spending, which accounts for about 70% of US economic activity, accelerated to a 3.7% annual pace last quarter, up from 2.8% in the April-June period. Exports also contributed to the third quarter's growth, increasing at an 8.9% pace. On the other hand, growth in business investment slowed sharply last quarter on a drop in investment in housing and in nonresidential buildings such as offices and warehouses. But spending on equipment surged.

In a sign that the nation's households, whose purchases drive most of the economy, will continue spending, the Conference Board said Tuesday that its consumer confidence index posted its biggest monthly gain since March 2021. The proportion of consumers who expect a recession in the next 12 months dropped to its lowest point since the board first posed that question in July 2022. At the same time, the nation's once-sizzling job market has lost some momentum.

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On Tuesday, the government reported that the number of job openings in the United States fell in September to its lowest level since January 2021. And employers have added an average of 200,000 jobs a month so far this year—a healthy number but down from a record 604,000 in 2021 as the economy rebounded from the pandemic recession, 377,000 in 2022, and 251,000 in 2023. On Friday, the Labor Department is expected to report that the economy added 120,000 jobs in October. That gain, though, will probably have been significantly held down by the effects of Hurricanes Helene and Milton and by a strike at Boeing, all of which temporarily knocked thousands of people off payrolls.

(More GDP stories.)