The slowing GDP growth may influence voter sentiment in the upcoming election, as economic performance is a key issue for many constituents.
The discrepancy between expected and actual GDP growth highlights the challenges facing the U.S. economy, particularly in the context of ongoing inflation and recession fears.
If the trend of slowing GDP growth continues, it may impact the economic strategies proposed by candidates in the upcoming election.
The job creation figures suggest a potentially robust labor market, which could bolster consumer confidence and spending if maintained.
U.S. gross domestic product (GDP) growth slowed to 2.8% in the third quarter, according to preliminary estimates from the Commerce Department, released on October 30, 2024. This figure is a decline from the 3% growth recorded in the second quarter and falls short of analysts' expectations of 3%. The annualized growth rate, which measures GDP in relation to the previous quarter, indicates a 0.7% increase, consistent with the second quarter's performance. In contrast, the euro zone reported a third-quarter growth of 0.4%.
The growth in the U.S. economy was primarily driven by increases in consumer spending, exports, and federal government spending. Consumption, which constitutes about two-thirds of GDP, remains a significant factor. As the economy continues to be a critical concern for American voters ahead of the November 5 election, both Vice President Kamala Harris and former President Donald Trump are acutely aware of the electorate's worries regarding inflation and potential recession.
Additionally, the private sector demonstrated resilience with the creation of 233,000 jobs in October, significantly exceeding analysts' predictions of 111,000 new jobs, according to a survey by ADP. This job growth may provide some reassurance to voters regarding the strength of the labor market despite economic uncertainties.
