This Halloween did not produce nightmares for consumers and investors. In fact, two new reports released on Wednesday show that the US economy is strong and growing.
Of course, there are concerns in certain areas of the economy – such as high grocery prices and interest rates. However, i Bureau of Economic Analysis (BEA) report on Gross Domestic Product (GDP) and the ADP report on private sector activities are cause for confidence in the nation’s financial health.
GDP Is Rising
GDP measures the amount of goods and services produced in the United States. The most popular assessment of the overall health of the US economy.
Following a three percent increase in GDP in the second quarter, the latest calculations show that GDP increased by 2.8 percent in the third quarter.
An increase in GDP usually means that the economy is doing well.
What Does GDP Mean To You
A good GDP is not the only thing they pay attention to in economics. It can have good results for you and your family.
An increase in GDP is an indication that the economy is growing. That can lead to many benefits including an increase in your quality of life. It can also improve the health of the nation’s finances by reducing the government deficit
When the economy grows, income tends to rise. That leads to more money for households to spend and invest. In turn, spending and investment boost GDP.
Using Fuels Growth in the US Economy
Spending by consumers, government, and businesses fueled current growth in GDP.
Business spending increased by 11 percent in the third quarter.
This year, government spending is expected to be in line with this less than one-third of GDP. The Biden administration has been quick to take little credit for the performance of the US economy.
“The strong response of US funds partially explains why GDP growth and consumer spending were stronger in the United States than in other advanced economies,” according to a statement from the White House. “US real GDP growth from 2019Q4 was 11.4%, more than double the next largest increase in the G7.”
The International Monetary Fund (IMF) commented on America’s economic strength compared to other developed countries last week. In it World Economic OutlookThe IMF raised its 2024 and 2025 growth forecasts for the US In fact, the US was the only country forecast to increase growth in both years.
The IMF also said that the national economy has been successful soft landing Federal Reserve Chairman Jerome Powell intended to say. A soft landing, as described by Powell, is a drop in inflation without an increase in unemployment.
However, much of the increase in GDP depends on our spending. About 2.5 percent of total growth is generated from consumer spending. That category increased from 2.8 percent in the second quarter to 3.7 percent in the third quarter, according to the BEA.
Private Sector Jobs are increasing
GDP growth may facilitate the creation of independent employment opportunities.
ADP data in private sector jobs showed that 233,000 new workers were hired in October. That’s the highest rate since July 2023, according to the payroll company.
The October private jobs figure was ahead of the new September hiring figure of 159,000. In addition, it doubled Wall Street’s forecast for 113,000 new jobs.
“Even in the middle of the storm, job growth was strong in October,” said Nela Richardson, chief economist, ADP. “As we close out the year, hiring in the US appears stronger and stronger.”
The positive jobs numbers are especially strong given the events that plagued the US economy in October. Two major hurricanes, Helene and Milton, struck the Southeastern US In addition, labor disruptions at Eastern and Gulf ports and Boeing workers threatened to wreak havoc on the economy. While Boeing workers were still on strikeThe staff of the International Longshoremen’s Association were I returned to work within three days.
The Boeing strike put 33,000 workers out of work. As a result, manufacturing was the only category in the ADP report that showed a decline in jobs.
In addition to the increase in employment, private sector jobs have increased wages. Wages in October were 4.6 percent higher than the same period last year, according to ADP. For those who changed jobs, the number was 6.2%.
The Bureau of Labor Statistics (BLS) is scheduled to report its employment figures on Friday. ADP and Labor often report different figures because the government reports figures from the entire labor market – including civil servants. Employment is expected to rise by nearly 100,000 and unemployment to stand at 4.1 percent.
All of the above will be hot topics at next week’s Fed meeting. The central bank’s November meeting will be held on the sixth and seventh. At the end of that meeting, Powell will announce changes, if any, to the federal funding level. That is the interest rate that banks charge for borrowing or lending money. That rate also affects the interest rates charged on consumer spending on things like mortgages and credit cards.
Consumer Confidence Strengthened
A day before the release of the GDP and ADP employment reports, another survey showed optimism that the economy is growing.
The Conference Board reported Tuesday that its an indicator of consumer confidence it increased from 99.2 percent in September to 108.7 this month. It was the biggest monthly increase since March 2021, according to the research firm.
“In the October reading, all five components of the index improved,” said Dana M. Peterson, the firm’s chief economist. “Consumers’ assessment of current business conditions has turned out to be positive. The outlook for current job openings has rebounded after several months of weakness, possibly reflecting better labor market data. Compared to last month, consumers were more optimistic about future business conditions and remained positive about future income.
People of all ages and incomes have shared an increase in self-confidence, according to Peterson. The biggest increase in self-confidence came from 35 to 54 year olds. Households under the age of 35 and those earning more than $100,000 a year remain the most confident.
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