Robust consumer spending, AI-related investment power US economy in third quarter

In the third quarter of 2022, the U.S. economy experienced its most robust growth in a year, despite the impact of higher oil prices resulting from the conflict in the Middle East. This impressive expansion, attributed to consumer spending and increased investment in artificial intelligence by businesses, contrasted with the unfavorable perception of the economy among consumers, as evidenced by President Donald Trump's historically low approval ratings and the decline in consumer sentiment.

The Commerce Department's announcement of the stronger-than-anticipated growth in gross domestic product (GDP) revealed a promising economic outlook, even as it approached the midterm elections on Tuesday. The report's release came just a week before the pivotal congressional event, which would determine the control of the U.S. Congress.

Economists were quick to highlight the significance of this growth, as well as recent data showing rising inflation and its spread in September. These factors combined, according to the experts, supported the case for the Federal Reserve to raise interest rates in December. The central bank, in a Wednesday statement, maintained its benchmark interest rate within the 3.75 percent-4.00 percent range, acknowledging that inflation was still a concern.