The US economy grew beyond forecasts

On December 23, the US Department of Commerce announced that the country’s GDP increased by 4.3% in the third quarter (adjusted on a yearly basis).

In particular, consumption increased by 3.5% last quarter – higher than 2.5% in the second quarter. This is still the main driving force for the US economy. Most of the increase in consumption comes from people rushing to buy electric cars before tax incentives expire on September 30. In October and November, car sales slowed.

However, the third quarter report is considered outdated, due to delayed publication due to the 43-day US government shutdown. The Congressional Budget Office (CBO) estimates that the government shutdown could cause the country’s fourth-quarter GDP to decline by 1-2%. Much of the reduction will be restored, but $7-14 billion may be lost forever.

Besides, the US consumption picture is still mixed. Surveys show that consumption is led by high-income households, thanks to the rising stock market. On the contrary, consumers in the low and middle income groups still struggle with increased living costs due to import taxes. Economists call this a K-shaped economy.

This phenomenon also exists in business groups. While large corporations still withstand import taxes and invest heavily in artificial intelligence, small companies are facing difficulties.

Economists say that US President Donald Trump’s policies have caused a payment crisis, causing his approval rating to decline. Families are also facing the possibility of rising electricity bills due to the rapid development of AI and cloud computing data centers, causing energy demand to skyrocket.

However, on the social network Truth Social, Mr. Trump said that “import taxes have helped the US record great economic data.” He predicted that the situation “will get better and better”, once again affirming that the US “does not have inflation”.

The US Federal Reserve (Fed) this month reduced interest rates for the third consecutive time, bringing the reference interest rate in the US to 3.5-3.75%. However, this agency warns that lending interest rates are unlikely to decrease further in the short term, because they need to wait for further developments in inflation and the labor market.