Good news: The U.S. economy grew again in the third quarter after shrinking in the first six months of the year. The bad news? It not going to stop growing talk of recession. Here’s how to read the third-quarter report on gross domestic product on Thursday morning.
A positive turn The official scorecard of the economy, GDP, is forecast to expand at a 2.3% annual pace in the period covering July through September, according to Wall Street
analysts. That would mark a big improvement after GDP contracted at a 0.6% clip in the second quarter and 1.6% in the first quarter. It was the first back-to-back declines since the onset of the pandemic in 2020. Two quarters of declining GDP meets an old rule of thumb for when an economy is in recession. But the group of noted economists who make the official call use a much broader definition that suggests the U.S. was still in expansion mode. The biggest reason the U.S. probably wasn’t in recession: Consumers kept spending a lot of money, even after adjusting for inflation.Consumer spending The headline GDP number often obscures what is really going on in the economy. And that’s exactly what happened in the first half of the year. GDP turned negative in the first six months mostly because of a record trade deficit and a smaller inventory buildup among U.S. businesses. Yet the main driver of the economy, consu …