The U.S. economy grew in the third quarter of this year due to trade fluctuations, new home construction and consumer and government spending, the Commerce Department said Thursday in the final major economic report before the midterm elections.
The Bureau of Economic Analysis said the gross domestic product increased 2.6% in July, August and September, but economists say the bump masks underlying economic weaknesses and will likely be a mirage.
Investors still fear slowing growth in the fourth quarter and a downturn or recession in 2023.
Capitol Hill Republicans this week predicted a “ghost” or “phantom” report in which growth was propped up by a surge in exports and government spending.
The Federal Reserve has been increasing interest rates to tame inflation. The actions are likely to spark a slowdown, particularly in the housing market, which is a key part of GDP.
Thursday’s report emerged less than two weeks before the midterm elections that will determine which party will control Congress.
President Biden and Democrats could latch onto the positive news in the third quarter, while Republicans, who have hammered the White House over its economic policies, will undoubtedly point to overall weakness in growth and dark clouds ahead.