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| Photo Credit: AP. |
U.S. Gross Domestic Product (GDP) grew at an annual rate of 2.6% in the third quarter allaying fears of a possible recession following months of interest rate hikes by the Feds in a bid to control soaring inflation. The report from the Bureau of Economic Analysis Thursday morning is cheering news for the economy after two quarters of decline.
The report
showed decreasing household spending, according to The Washington Examiner.
Investment in
the housing sector was down at an annual rate of 26.4%.
The report
also indicated a 2.77% rise in net exports.
This week
the Federal Reserve is expected to implement fresh 0.75% hike in interest rate
to meet its target, according to the Washington Examiner.
The Feds
will likely continue with its rate hikes as long as the country’s inflation
remains above its 2% target. In August inflation stood at 6.2%, the Washington
Examiner cited a personal consumption expenditures index favored by the Fed.
In July the
Federal Reserve hiked the nation’s interest rate by three-quarters of a percent
in a bid to stem soaring inflation, increasing fears of possible recession.
“Recent indicators of spending and production
have softened,” the Fed said in a statement. “Nonetheless, job gains have been
robust in recent months, and the unemployment rate has remained low. Inflation
remains elevated, reflecting supply and demand imbalances related to the
pandemic, higher food and energy prices, and broader price pressures.”
U.S.
inflation figures released early July rose to about 11.3% as measured by
producer wholesale prices for the month of June 2022, according to a report
from the Bureau of Labor Statistics.
The Federal
Reserve is struggling to control skyrocketing inflation and is raising interest
rates after raising rates three times since the beginning of the year.
In June, the
central bank hiked its interest rate target by three-fourths of a percentage
point for the first time since 1994 as against the quarter of a percentage
point, or 25 basis points that is typical of the Fed.