From the Wall Street Journal:
"The U.S. economy grew at a 2.6% annual rate in the third quarter despite a slowdown in consumer spending during the summer amid high inflation and rising interest rates.
"Gross domestic product - the broadest measure of goods and services produced across the nation - increased after declining in the first half of the year, the Commerce Department said Thursday. Consumer spending, the economy’s main engine, cooled from July to September compared with the previous quarter."
According to the story, "The third quarter included mixed signals on the economy’s performance. Consumer inflation remained close to a four-decade high as broad price pressures persisted. The Federal Reserve continued rapidly raising interest rates in an effort to slow economic activity enough to lower inflation.
"Many economists are worried about the possibility of a recession in the coming 12 months. They expect the Fed’s efforts to combat inflation will further weigh on the economy, after higher rates have already begun denting the housing market and stock prices … So far, though, key segments of the economy have remained resilient. The job market cooled some but stayed strong with robust payroll gains and low unemployment."
- KC's View:
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I'm not an economist, and have a shaky understanding of economic theory. But I gather that while the economy is performing better than expected, it almost doesn't matter because these macroeconomic trends pale when compared to the high price of gas and food, and high mortgage rates.
It's funny, but with age comes perspective. I'm old enough to remember when gas was 45 cents a gallon, but also when it was approaching five bucks, and when lines snaked around gas stations and you could only fill your tank every other day. Sure, mortgage rates are in the seven percent range, but when we first bought our house in 1984 our adjustable rate was more than 13 percent. It is all about perspective.
But that doesn't matter when families are struggling to feed and clothe their kids, and they have to make choices between fueling their cars and heating their houses this winter.
