After a pair of quarters of negative growth — the definition of a recession — the U.S. economy picked up growth again in the third quarter, The Washington Post reported.
The Bureau of Economic Analysis reported 2.6% growth year over year Thursday, but economists note this might be a short-term spell from what had been two quarters of economic contraction.
"The irony is, we're seeing the strongest growth of the year when things are actually slowing," KPMG chief economist Diane Swonk told The Post. "There are some real cracks in the foundation. Housing is contracting. The consumer is slowing. GDP is growing, but not for all of the right reasons."
Healthcare spending helped lift the gross domestic product, along with increased government spending at the federal, state and local levels; but consumers were still cutting their spending on goods, according to the report.
A narrowing trade deficit was also a big positive for the GDP, as exports on goods and services increase, while imports have slowed. That comes after data earlier this year showed a record-high gap between exports and imports, The Post reported.
"The makeup of GDP isn't necessarily as positive as it looks on the surface," according to Jefferies chief financial analyst Aneta Markowska, who projects a recession in 2023. "It's more of a one-time boost than growth that is likely to continue."
Home sales are down for eight consecutive months, as rising interest rates will continue to be a drag on that sector, The Post reported. Mortgage rates are over 7% for the first time since the early 2000s, according to Freddie Mac.
Still, President Joe Biden has positive numbers to report in the final weeks before the midterms.
"Today we got further evidence that our economic recovery is continuing to power forward," Biden said Thursday. "Our economy has created 10 million jobs; unemployment is at a 50-year low; and U.S. manufacturing is booming.
"Now, we need to make more progress on our top economic challenge: bringing down high prices for American families."
The top Republican on the House Ways and Means Committee is pumping the brakes on optimism, though.
"Key drivers of the economy such as investment and consumer spending shrunk again," Rep. Kevin Brady, R-Texas, wrote in a statement. "These are alarming red flags for the current stagnant economy, signaling the worst is yet to come."
Eric Mack ✉
Eric Mack has been a writer and editor at Newsmax since 2016. He is a 1998 Syracuse University journalism graduate and a New York Press Association award-winning writer.
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