The U.S. economy continued its robust trajectory in the third quarter showing 2.8% growth, a bit south of most economists’ expectations but a rate that reflects ongoing vitality amid high interest rates and growing unemployment and one driven by strong consumer spending.
A Wednesday Commerce Department report on the nation’s gross domestic product for July through September, a measure that accounts for all the goods and services produced during that time period, came in shy of the 3.1% expected by Dow Jones economists and is down from second quarter GDP growth of 3.0%.
But the 2.8% rate reflects a healthy arc for the U.S. economy and was supported by a 3.7% increase in consumer spending over the three-month period. Consumer spending has an outsize impact on the overall U.S. economy, accounting for some two-thirds of the nation’s GDP.
The report notes that, in addition to the jump in consumer spending, increases in exports and government spending also helped bolster the overall growth rate for the quarter.
Earlier this month, the Labor Department reported prices on consumer goods and services rose at a 2.4% annual rate in September, the lowest 12-month reading since February 2021. While down from August’s 2.5% measure, the September rate did not make it down to the 2.3% level that was widely expected.
Core inflation, which strips out volatile food and energy prices, came in at an annual rate of 3.3% in September, up 0.3% from August and a tenth of a percent higher over the last year.
“You’ve got the perfect combination of strong growth and slowing inflation. What more could you want?” Dan North, senior economist at Allianz Trade North America, told CNBC on Wednesday. “But a lot of people want to have lived a less inflationary period that is still hurting them. That’s why they think the economy is still rotten.”
What Utahns think about the economy
That pessimistic view of the economy is reflected in a recent Deseret News/Hinckley Institute of Politics poll conducted by HarrisX Interactive Oct. 15-19 of 813 registered Utah voters. It has a margin of error of plus or minus 3.4 percentage points.
When asked if, in general, the U.S. economy is on the right track or the wrong track, 71% of respondents said the wrong track, 22% the right track and 7% didn’t know. Parsing participants by political affiliation reflects stark differences in opinions about the direction of the nation’s economy.
While 55% of those who self-identified as Democrats said the economy was on the right track, only 16% of self-identified Republicans shared the positive sentiment. Among those who believe the economy is headed in the wrong direction, 78% were Republicans and 35% were Democrats. Among poll participants who self-identified as independents or another political party, 18% said the economy is on the right track, while 75% said it’s headed in the wrong direction.
Those in the poll making less than $50,000 a year were less likely to say the economy is going the right way than those making more than $100,000 annually. Also, among those who are employed, 25% say the economy is heading in the right direction compared to 16% of those who aren’t working.
Personal finances
Utah voters had a somewhat more mixed response when asked about their personal finances, though a plurality said things are headed in a negative direction.
When asked to rate their personal financial situation as improving, getting worse are staying the same, 19% of respondents said things were improving, 48% said getting worse and 31% told surveyors their personal financial status was staying the same.
Partisan disparities showed up in these responses as well, with 14% of Republicans rating their personal financial situations as improving while 44% of Democrats said the same. Half of the Republican poll participants said their personal fiscal situations were worsening as did 27% of Democrats. And just over a third of GOP respondents, 35%, said their personal financial situation was staying the same and so did 29% of Democrats.
Broken down by employment status, 25% of those surveyed who are working say their personal financial situation is improving, 46% getting worse and 28% the same. Among those not working, 10% say they’re improving, 51% getting worse and 35% the same.
A higher percentage of those earning less than $50,000 annually expressed that their situation is getting worse than those making more than $100,000 a year.