The US economy grew much faster in the third quarter than the original report. After a strong second quarter, the increased growth has been a welcoming sign for the economy getting back on track. The strong showing has been linked to a rise in consumer spending which accounts for 70% of the US GDP.
The future expected growth will be hard to predict but this has been the best growth in a decade. The recent rise in the single-family housing prices can be great predictor of the growth in the economy. However, the recent may led to a rise interest rates and with the end of quantitative easing. In October, the Fed announced that interest rates would stay the same for a considerable time. A change in the interest rates may lead to different expectations thus effecting the future outlook for the fourth quarter and next year's expectations.
It's nice to see that the economy is improving better, and not even just in a single quarter but consecutively. Since consumer spending is up 2.2% in this most recent quarter there is obviously more confidence in the economy. It's nice to see that as the Fed has stopped holding the U.S.'s hand and stopped its quantitative easing plans that the economy has still done well, and actually better than before.
ReplyDeleteAnother good example of how predictions of the economy's future behaviors can be very off. Fortunately, the economy did better than the predictions and not worse. This bodes well for the future months, but you never know when it might turn on a dime.
ReplyDeleteFuture prediction of economic projections are very hard, specifically judging from past trajectories. It is significant that the US economy is improving on a consistent basis. The rise of consumer spending coupled with the feds reduced quantitative easing could result in future growth.
ReplyDeleteAccording to Joel Every in the Economic Outlook Conference, interest rates are expected to rise in the future which will decrease investment. But in the near future I agree that the economy ail exceed its forecast as it did in the third quarter.
ReplyDeleteThe improvement of the US economy is great and we would hope that it continues. The change in the Fed's policies will be an interesting subject to look at for this fourth quarter and the first quarter of 2015 in comparison to the forecasts.
ReplyDeleteSeeing improvement in the economy is an extremely promising sign. Although predictions of what will happen next can’t be 100%, I am hopeful that the economy will continue to thrive.
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