The US Bureau of Economic Analysis (BEA) released its third estimate of the September quarter national accounts for the US economy overnight, which revealed that the economy grew at the fastest pace in 11 years, surging by a seasonally adjusted 5% annual rate (see next chart).
According to the BEA:
The increase in real GDP in the third quarter primarily reflected positive contributions from PCE, nonresidential fixed investment, federal government spending, exports, state and local government spending, and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The acceleration in the percent change in real GDP reflected a downturn in imports, an upturn in federal government spending, and an acceleration in PCE that were partly offset by a downturn in private inventory investment and decelerations in exports, in state and local government spending, in residential fixed investment, and in nonresidential fixed investment.
Real GDP per capita is now 2.6% above its pre-GFC peak (see next chart).
The Wall Street Journal provides some texture:
“There is a positive feedback loop going on at the moment,” Mike Jakeman, global analyst for the Economist Intelligence Unit, said in a note. “Job creation is running at the strongest rate for 15 years. More people in work means more income, which means more private spending, which means more business investment, which means more hiring”…
The nation has seen its best year of hiring since 1999.
As shown below, employment is rising fast and unemployment has fallen sharply, which suggests that the economic recovery is broad-based:
Good to see.
