The US economy grew in the third quarter at the fastest pace in a year, supercharged by the debt-funded AI capex spending spree and a resilient American consumer.
Real Gross domestic product (adjusted for inflation) increased an annualized 3.4% in the three months through September after growing 2.2% in the second quarter, according to the initial estimate by the Bureau of Economic Analysis. The rise in GDP beat the 3.2% median projection in a Bloomberg survey of economists.
Real final sales to private domestic purchasers - a closely watched metric that combines consumer spending and fixed private investment - rose 4.9% in the third quarter, up from 4.6%. Government spending also increased, largely reflecting oil sales from the Strategic Petroleum Reserve. Higher imports, which count as a negative in calculating GDP, offset some of the gains.
While personal spending came in stronger than expected, rising an annualized 3.8%, above estimates of a 3.4% print, the biggest driver behind the world’s largest economy continued to be relentless business spending (which has resulted in a massive debt bubble to go along the AI stock bubble). Outlays for equipment contributed more to GDP in the third quarter than at any time since 2011 outside of the pandemic rebound.
Household spending was similarly robust, increasing an annualized 3.8% for a second straight quarter, even amid historically low
