{"id":2080012,"date":"2023-10-26T11:14:04","date_gmt":"2023-10-26T15:14:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/consumer-government-spending-expected-to-support-gdp-in-3rd-quarter\/"},"modified":"2023-10-26T11:17:23","modified_gmt":"2023-10-26T15:17:23","slug":"consumer-government-spending-expected-to-support-gdp-in-3rd-quarter","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/consumer-government-spending-expected-to-support-gdp-in-3rd-quarter\/","title":{"rendered":"Consumer and government spending to boost Q3 GDP."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fconsumer-government-spending-expected-to-support-gdp-in-3rd-quarter%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2080012&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>Is the US \u2063Economy on the Verge of a Soft Landing?<\/h2>\n<p>The \u2062upcoming release of\u200c third<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-recession-is-here-atlanta-fed-predicts-negative-second-quarter-economic-growth\/\" title=\"The Recession Is Here: Atlanta Fed Predicts Negative Second Quarter Economic Growth\">-quarter <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/its-official-trump-crushes-record-for-largest-gdp-increase-in-us-history-3rd-quarter-gdp-up-33-1\/\" title=\"IT'S OFFICIAL: Trump Crushes Record for Largest GDP Increase in US History -- 3rd Quarter GDP Up 33.1%\">gross domestic product<\/a><\/a> (GDP) numbers by the Bureau\u200b of Economic Analysis (BEA) on Oct. 26 could provide insight into the\u2062 state \u2063of the US economy. \u2062It may indicate whether \u200bthe economy is heading \u2063towards a soft landing or if \u200cthe strong growth \u200cexperienced in the July-to-September period \u2062was just a temporary boost.<\/p>\n<p>Early\u2063 estimates\u2062 suggest that the US economy expanded even more than in the second quarter.<\/p>\n<blockquote>\n<p>The Federal Reserve \u200dBank of Atlanta&#8217;s GDPNow model <a href=\"https:\/\/www.atlantafed.org\/cqer\/research\/gdpnow\" target=\"_blank\" rel=\"noopener\">estimate<\/a> shows that US\u200b output in the\u200d recent\u2063 quarter\u2063 was 5.4 percent, while\u2062 the New York Fed\u2064 Nowcast <a href=\"https:\/\/www.newyorkfed.org\/research\/policy\/nowcast#\/nowcast\" target=\"_blank\" rel=\"noopener\">suggests<\/a> that the economy\u2063 grew \u2063by 2.55\u2063 percent. The St. Louis Fed&#8217;s Real GDPNowcast <a href=\"https:\/\/fred.stlouisfed.org\/series\/STLENI\" target=\"_blank\" rel=\"noopener\">forecasts<\/a> a print of 2.3 percent.<\/p>\n<\/blockquote>\n<div class=\"shortcode\">\n<h2 class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related Stories<\/h2>\n<ul>\n<li>\n<div class=\"grow\">\n<a href=\"http:\/\/www.theepochtimes.com\/epochtv\/us-gdp-growth-not-heading-in-right-direction-chief-investment-strategist-5427346?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3 class=\"text-sm sm:text-base\">US GDP\u200c Growth Not Heading in Right Direction: Chief \u2063Investment Strategist<\/h3>\n<p><\/a><\/p>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">7\/27\/2023<\/div>\n<\/div>\n<\/li>\n<li>\n<div class=\"grow\">\n<a href=\"http:\/\/www.theepochtimes.com\/article\/us-first-quarter-gdp-core-inflation-revised-higher-5291980?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3 class=\"text-sm sm:text-base\">US First-Quarter \u200bGDP, Core\u200c Inflation Revised Higher<\/h3>\n<p><\/a><\/p>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">5\/25\/2023<\/div>\n<\/div>\n<\/li>\n<\/ul>\n<\/div>\n<p>JPMorgan Chase <a href=\"https:\/\/twitter.com\/JimPethokoukis\/status\/1714298401804693940\" target=\"_blank\" rel=\"noopener\">revised<\/a> its third-quarter GDP forecast upward to 4.3 percent from 3.5 percent, while KPMG Chief Economist Diane Swonk is <a href=\"https:\/\/twitter.com\/KNyeEcon\/status\/1717154224771874845\" target=\"_blank\" rel=\"noopener\">projecting<\/a> a \u200c5.5 percent reading.<\/p>\n<p>Economists believe that the third-quarter GDP growth rate holds\u200d significant implications, \u2064especially for monetary policy.<\/p>\n<div class=\"shortcode post-related-videos\">\n<div class=\"lazyload-wrapper\">\n<div class=\"lazyload-placeholder\"><\/div>\n<\/div>\n<\/div>\n<p>Fed Chair\u2062 Jerome Powell has emphasized the need for below-trend economic growth before considering a \u200dsustainable\u200b return to \u200cthe 2 percent inflation target. \u200bThe aim \u2062is to\u200b slow \u200cdemand and\u200b ease inflationary \u2064pressures through higher interest rates. However, despite rising rates\u2064 and\u2064 elevated inflation, consumer\u200d spending has remained strong.<\/p>\n<p>Retail sales and personal spending have shown consistent\u200c growth, and the\u2063 labor market has performed well, with new job creation and low unemployment rates.<\/p>\n<p>However, Gregory Daco, chief \u2064economist at \u200cEY-Parthenon, \u200dwarns\u200c against assuming that this strong momentum will continue.<\/p>\n<blockquote>\n<p>&#8220;The\u200b US economy continued to show remarkable resilience over \u2063the summer, with surprisingly robust job\u2062 growth \u2062and an unexpected consumer spending spree that likely propelled real GDP growth above \u200b5% annualized \u200cin Q3,&#8221; he wrote in \u2062a <a href=\"https:\/\/www.ey.com\/en_us\/strategy\/macroeconomics\/us-economic-outlook-october-2023\" target=\"_blank\" rel=\"noopener\">note<\/a>. &#8220;While these signs of economic \u200cstrength\u200b will likely \u200bfuel speculations \u200bthat the economy is reaccelerating,\u2063 we do not\u200b expect such strong momentum\u200c will be sustained.&#8221;<\/p>\n<\/blockquote>\n<p>The US economy faces \u2062various\u200d economic challenges, including tightening lending \u2063standards, surging Treasury yields, eroding pandemic-era savings, rising corporate \u2064bankruptcies, and above-trend \u2063inflation. Geopolitical tensions and foreign conflicts could also impact the economic landscape.<\/p>\n<div class=\"my-5\">\n<p>On the other\u2062 hand, government spending\u200b has played a\u200d significant role in supporting the\u2063 gross domestic product.<\/p>\n<h2>Government Spending and GDP<\/h2>\n<p>Spending by federal and state governments has risen \u200dto \u200bthe point where\u200d it is propping up the \u200dGDP.<\/p>\n<\/div>\n<div class=\"my-5\">\n<p>Last year, federal net outlays as\u2062 a percentage of GDP were\u200b <a href=\"https:\/\/fred.stlouisfed.org\/series\/FYONGDA188S\" target=\"_blank\" rel=\"noopener\">25 percent<\/a>, the highest since World War II.<\/p>\n<\/div>\n<div class=\"my-5\">\n<p>In the second quarter, government consumption\u200c rose at an annualized pace of 3.3 percent, \u200dwith federal\u200c spending, \u200bnational defense, and state \u200band local government outlays all increasing.<\/p>\n<\/div>\n<p>The effects of recent legislative initiatives, such as the Inflation Reduction\u2062 Act and the U.S. CHIPS\u2064 and Science Act, are starting to\u200d show\u2062 in the \u200bdata. Companies, both domestic\u200c and foreign, have taken advantage of\u200c subsidies to invest in factories, produce goods, and hire workers.<\/p>\n<div class=\"my-5\">\n<p>President Joe\u200c Biden&#8217;s administration aims to restore the public sector as a \u200bpartner in\u2064 long-run growth, with a focus on infrastructure and workforce development.<\/p>\n<\/div>\n<p>However, government payrolls \u200dhave also grown,\u200d accounting\u200c for a significant\u2064 portion\u2064 of \u200bjob\u200c creation in 2023. The administration&#8217;s spending strategy aligns with economist John Maynard Keynes&#8217; \u2062recommendation \u2064of deficit-financed spending to stimulate\u2062 the economy.<\/p>\n<p>While \u200bthe \u200bgovernment has had \u200bno\u200d trouble\u200b spending on public works projects, there are concerns about\u2064 the country&#8217;s\u2063 fiscal path. Recent Treasury auctions have shown weakened demand for bonds, indicating apprehension about\u2063 the government&#8217;s ability to manage \u2062its deficits.<\/p>\n<div class=\"my-5\">\n<p>The current administration \u2062hopes\u2064 that \u2063its investment efforts will eventually lead\u200c to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/market-reaction-to-italy-election-outcome\/\" title=\"Market reaction to Italy election outcome\">higher tax revenue<\/a>, helping to fund the growing \u200cdeficits.<\/p>\n<\/div>\n<p>As\u200d the \u2062US economy \u200bnavigates these challenges, \u2064the third-quarter GDP numbers will provide valuable insights\u200d into its trajectory and the potential for a\u2064 soft landing.<\/p>\n<p> <\/p>\n<h2> How has <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/consumer-government-spending-expected-to-support-gdp-in-3rd-quarter\/\" title=\"Consumer and government spending to boost Q3 GDP.\">government spending impacted recent \u200beconomic growth<\/a> and what concerns are there about its sustainability?<\/h2>\n<p><span>  Economic Outlook \u2063 <\/h2>\n<\/div>\n<p>Government spending has\u2062 been a major driver of economic growth in recent years. The \u2062pandemic relief measures and infrastructure investments have provided a boost to the economy. However, there are concerns about the sustainability of this spending and the impact\u2063 it may have on \u200cinflation and interest\u2062 rates.<\/p>\n<p>The Federal Reserve has been closely monitoring these developments and has already begun tapering its monthly bond purchases. This reduction in monetary\u200d stimulus is a signal that the central bank believes the economy is on \u200da path towards a soft landing, with growth\u2064 moderating \u200dto a sustainable level.<\/p>\n<p>However, there are differing opinions among economists about the future \u200ctrajectory\u200b of the economy. Some argue that the strong consumer spending and \u200dlabor market\u2063 performance will continue to support \u200dgrowth, while others believe that the\u200b challenges mentioned earlier will hinder economic expansion.<\/p>\n<p>It is important to note\u2063 that the COVID-19 \u2064pandemic \u2062continues to pose risks to the economy. The emergence of new variants and the potential for\u2063 additional waves\u2062 of infection could disrupt economic activity and dampen consumer confidence. The path\u2064 of the \u2063pandemic remains unpredictable, and its\u200c impact on the economy \u200bcannot be ignored.<\/p>\n<p>In conclusion, the upcoming\u200d release\u200b of third-quarter GDP numbers will provide valuable insights into the state of the US economy. While there are indications of strong growth, there are also challenges and uncertainties that \u2064need to be\u200b taken \u2064into account. The Federal Reserve&#8217;s approach to monetary policy\u2064 and the government&#8217;s fiscal decisions will play a crucial role \u200din determining \u200dwhether the\u200c economy achieves \u2064a soft\u2063 landing or faces\u2063 more significant turbulence\u2062 in the months ahead.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>might be slowing down in the third quarter, potentially indicating a soft landing or the end of a period of strong growth. The Bureau of Economic Analysis is set to release the GDP numbers on Oct. 26, providing further insight into the state of the U.S. economy.<\/p>\n","protected":false},"author":278,"featured_media":2080013,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2080012","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2080012","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2080012"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2080012\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2080013"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2080012"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2080012"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2080012"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}