Oct. 27 (UPI) — The U.S. economy posted its first quarterly gain in 2022 on Thursday, beating estimates from Wall Street and temporarily easing fear of a recession.
The gross domestic product, which calculates the sum of all goods and services produced from July to September, increased 2.6%, according to the Bureau of Economic Analysis. Dow Jones predicted the economy would grow 2.3%.
“The increase in real GDP reflected increases in exports, consumer spending, nonresidential fixed investment, federal government spending, and state and local government spending, that were partly offset by decreases in residential fixed investment and private inventory investment,” the BEA report said. “Imports, which are a subtraction in the calculation of GDP, decreased.”
The first quarter showed a GDP decrease of 1.6% and a 0.6% fall in the second quarter.
“If you take a step back and look at GDP, it’s gone effectively nowhere over the last year,” said Mark Zandi, chief economist at Moody’s Analytics, according to NPR. “One quarter or two it’s down a bit. This quarter it’s up a bit. But net-net, we’re kind of treading water.”
The report said the increase in exports reflected increases in both goods and services. The leading contributors to the increase were industrial supplies and materials, notably petroleum and products along with other non-durable goods.
An increase in services, led by health care and “other” services, was partly offset by a decrease in goods, led by motor vehicles and parts as well as food and beverages.
Paul Ashworth, the chief North American economist at Capital Economics, said while the 2.6% rebound in the third quarter more than reversed the decline in the first half of the year, there are serious questions about if that improvement will be sustained.
“Exports will soon fade and domestic demand is getting crushed under the weight of higher interest rates,” Ashworth said, according to CNBC. “We expect the economy to enter a mild recession in the first half of next year.”