By Basant El-Faramawy
The United States economy expanded at an annualized rate of 3.4% in the third quarter, according to Commerce Department data released Thursday. The growth accelerated from 2.2% in the previous quarter and exceeded the 2.5% rate recorded in the first quarter.
Resilient hiring and AI spending support growth
Despite elevated inflation, hiring has continued to grow at a slower pace while unemployment remains low by historical standards. A surge in spending on artificial intelligence, including chips and data centers, has helped boost the economy in recent quarters.
Fed Chair Warsh expresses optimism amid inflation concerns
Federal Reserve Chair Kevin Warsh said Wednesday that economic activity is expanding at a strong pace and domestic spending has been resilient. He acknowledged uncertainty from geopolitical developments but voiced optimism about U.S. economic performance.
Inflation remains above target
Prices rose 3.7% in September compared to a year earlier, more than a percentage point above the Fed's 2% target. The central bank raised rates by a quarter percentage point last month, the first increase in three years, and left rates unchanged this week while awaiting further data.
Markets expect further rate hike
Market sentiment indicates an 85% probability of a quarter-point rate increase at the Fed's December meeting, according to CME Group's FedWatch Tool. Another hike could risk slowing growth and the job market further.
