The U.S. economy grew at its fastest pace in nearly two years in the third quarter as higher wages from a tight labor market helped to power consumer spending, again defying warnings of a looming recession.
Gross domestic product increased at a 4.9% annualized rate last quarter, the fastest since the fourth quarter of 2021, the Commerce Department’s Bureau of Economic Analysis said in its advance estimate of third-quarter GDP growth. Economists earlier predicted the GDP to rise at a 4.3% rate.
While the robust growth pace notched last quarter is unlikely sustainable, it was a testament to the economy’s resilience despite aggressive interest rate hikes from the Federal Reserve. Growth could slow in the fourth quarter because of ongoing union strikes and the resumption of student loan repayments. Learn more.