U.S. Economy Returned to Growth in Third Quarter

Oct 27, 2022 · 361 comments
David (Texas)
Just remember under a Democratic White House, Senate & House (all the levers of power). Inflation is at a 40 year high, gas prices are averaging $3.94 nationally, Southern Border chaos, baby food shortages, and violent crime is surging nationally. If your happy with this then vote Democratic. If you want change then vote Republican!
Don (Butte, MT)
Thanks, New York Times, for improving this headline from what appeared electronically this morning. Always good to return to the facts.
Independent American (USA)
Americans are being price gouged but you'll never hear that from Rumplicans because when it's happening under them "it's capitalism". Yet America wouldn't be so far in debt if not for Rumplicans' giving up the Nation's INCOME via tax breaks for the wealthy every chance they get. Fact is Rumplicans pretend to hate "socialism" but every time a little storm comes through, they demand $$$$ Government assistance, despite the majority of them pay less into our Nation's bank account than they ever put into it!
Rich M (Raleigh NC)
Look folks, there is no such thing as the “Biden Economy” … or the “Trump Economy” … or any other “presidential” economy. The US economy is like a bull elephant wandering around the jungle. Every 4 or 8 years we pick a new “jungle boy”, give him a stick, put him on top and tell him he’s in charge, when all he can do at best is try not to fall off. Sometimes the elephant gets sick and slows down. Sometime the elephant wanders into a swamp and bogs down. The only person with even a small amount of control is the Fed Chair, so if you want a label, call this the “Powell Economy”.
Jeff (Northern California)
Here's a story you'll never see on the Fox Entertainment Network.
dba (nyc)
OK, so you want to punish Biden and the Democrats for inflation and crime. But what exactly will the Republicans do to lower inflation and crime?
Dabney L (Brooklyn)
It’s almost as if the media wants Biden and the Democrats to fail. Even positive news like this is shaded with an overtly negative bent. How about just one article once in a blue moon that illuminates the positive without all the “buts?”
Charles (New York)
@Dabney L Yes, considering the article on this same page is titled; "The Rising Tide of Global Sadness", I too, am wondering what's going on? It seems, like inflation, it's global as well. Oh no! Poor Biden, it seems, they are crowning the grim reaper this Halloween.
Karen P (Philadelphia)
2.6 annual growth would have been considered very robust before the pandemic. Coming out of a pandemic it’s amazing. Unemployment at historic lows. GDP growing at a solid clip, an overly hot housing market slowing. This recession is the “migrant caravan” of 2022…always about to arrive but never doing so. Hm so odd in an election year. Clearly the Democrats know how to manage the economy and our household will vote accordingly. Time to get off the fearmongering propaganda train.
Ron (Texas)
Biden saiid that gasoline prices are down, where? What does “down” mean. Please do not drain the SPR, Mr.Biden. The country will need gasoline after the mids. Drawing down the SPR for votes is not good for the country. Think hard about thAt.
Dabney L (Brooklyn)
Thank you President Biden for your calm, steady leadership. The fruits of your labor are bearing fruit. Sadly, America will likely sweep Democrats out of power in the midterms next month because they are spending a little more to fill their gas guzzling Escalades, Yukon XLs and RAM trucks.
dba (nyc)
I don't understand why voters believe that Republicans are better for the economy. They only thing Republicans ever do is pass tax cuts for wealthy people and corporations.
KI (Asia)
A 10% inflation is nothing to me. We have been throwing out more than 10% of foods we bought, we have changed our iPones that were still in good shape, we can change soda to tap water, etc., etc. It's pretty easy to save 10% and the inflation will die down automatically. No FED control is needed.
MH (Rhinebeck NY)
It is interesting that BoA (and other Wall Street ilk) consider slowing rate of growth a bad thing.... not just growth, but rate of growth. The baseline growth is limited by available wages in the longer run-- yet various tentacles of Wall Street demonize wages as one of the roots of economic disaster (I presume, their own fat paychecks don't count in the debit column). Fundamentally economists and Wall Street pumper/dumpers are completely clueless. It was abundantly clear when the pandemic started that no one had any idea of what was going on in the economy, and it is also obvious that still no one has a clue. The closest one can get to a viable model, is to use whatever most people believe even if those beliefs have zero connection to whatever "economic reality" that might actually exist. Follow the sheep, they are more likely to be right anyone else.
Tom (Alsip, IL)
Economic growth rebounded over the summer, the latest government data shows, but slowing consumer spending and a rapidly weakening housing market mean the report will do little to ease fears of a looming recession. I thought the reason everyone was hair on fire freaking about inflation was because everyone was spending like drunken sailors after 9 months on a sub. Pandemic induced low supply and high demand naturally resulted in higher prices. So the Federal Reserve has been aggressively raising interest rates to persuade people to slow down their spending spree. Higher interest rates that are supposed to curb inflation would undoubtedly slow down housing purchases and therefore housing construction. So, spending slow down was good before it is now bad? At some point one of these conditions has to be considered a positive sign and we can have a nanosecond of feel good moment. Maybe we should wait a month or two to see if this is a moderate correction that the Fed was striving for. Or is the objective to just keep everyone’s gut churning 24/7/365?
Bob (Texas)
Raising interest rates at this time coupled with printing and distributing money is not curbing inflation. In the pre - USA history tobacco was considered so valuable a commodity that it was used to buy and pay debts just like currency. Because tobacco was so valuable more people began farming it; and as the supply of tobacco increased its' value went down. This can be used as a comparison for what the result of printing money will do to the economy. Charging banks and subsequently business and individuals a higher rate to borrow money that has gone down in value does not reduce inflation.
Ayzed (Malaysia)
I hope the COVID "experiment" proved to the Malthusians in power (and the scientists who advise them) that restricting people's freedoms and locking them down for years will ultimately backfire, especially on the economy.
Charles (New York)
@Ayzed Nothing was proven. There was no experimental design or knowing what an alternate scenario would have looked like. What we have is endless and unproductive Monday morning quarterbacking and rearview mirror fixation. Restrictions are over now except for China. Good luck talking to their leadership about freedoms. In any event, that's history while geopolitical and geoeconomic turmoil is the new nemesis.
Vijay (Enfield, NH)
Someone please help me understand...... The goal is to cool the economy by raising interest rates. So mortgage rates are now over 7% and the goal is to make home prices come down by decreasing demand. So prices go down, but with rates so high, won't the overall cost to the consumer be the same or more? Less principal, more interest, same/greater overall payment? The only difference is that more money is now in the hands of banks in the form of interest payments instead of being in the hands of private citizens. And rents are up as a result also. So how has increasing interest rates been of any benefit to the consumer?
Iris Dou (CA)
@Vijay When interest rates are hiked up, the decrease in consumer demand helps bring prices back down to normal when inflation is high. By extension, consumers are benefitted (more purchasing power). Though hypothetically, too little inflation can end up weakening the economy.
Vijay (Enfield, NH)
@Iris Dou You may have missed my point. Prices will come down, but if interest rates are up, won't the overall cost to the consumer be the same or more? They won't really have more purchasing power. They will paying more in interest to lending institutions
Green apples (Boston)
The benefit to consumers is long term in nature. And the benefit is not from the higher rates themselves, you’re right, higher interest rates make some things more expensive for consumers. The Fed is trying to make sure that long-term inflation expectations are stable. If inflation takes hold or is even just unpredictable, bad things happen to consumers, such as: - companies don’t hire workers as readily, because it’s harder for them to project their profitability with the prices or raw materials jumping up and down. - consumers don’t spend as much, wondering whether they’ll be able to keep their job with corporate profits so unpredictable. - companies hold off on capital spending projects that can grow their business, because they don’t know if the cost of loan financing that they need for the project will go up mid-project or later, turning what is supposed to be a profitable project unprofitable. Without growth, companies hire fewer workers. The Fed’s goal is for everybody associated with the economy - lenders, borrowers, consumers, corporate managers - to feel like “inflation can be expected to be stable at such-and-such an annual rate of growth in the long term, so I can make long-term decisions that benefit me based on that.” That’s the best way for the economy to grow in the long term. Sorry for the long babble. It kind of inflated on me….
Axwall (Washington, DC)
Reports of economic growth are taken as indicators of economic strength. But economic strength of this sort, while it makes politicians and petro-criminals happy, only intensifies the climate emergency. Capitalism exists to expand and expands to exist. But if it keeps expanding it means the human species, and hundreds of other species, are doomed. It's time to imagine a life beyond capitalism.
Bob (Texas)
@Axwall Agree but the USA is not even close to being able to pull of what Switzerland has done or Finland. Its more realistic IMO to pursue a more just and possibly more nationalized capitalism.
Axwall (Washington, DC)
@Bob "Just capitalism" is a contradiction in terms. Capitalism has never been just. It's a system of exploitation.
Joe S. (California)
Well, if the economy's doing better, let's be sure to blame it on Joe Biden.
Matt (Brooklyn)
I'm waiting for the part where it says this is bad for Biden somehow.
Charles (New York)
@Matt The creative ingenuity of the comment section will somehow find a way to take care of that.
MJ (Boston)
Maybe it’s time for the Fed to ease up…
Imagine if the government could do something about price gouging. We might see consumer spending increase. Oh wait, the republicans voted in favor of price gouging and lowering consumer confidence. Anyone see Shell's earning reports? Good thing they own the GOP. Always trust the fools to tank the economy, and lay blame when in fact they have no plan, only fluff and lies.
Henry Porter (Middletown, Connecticut)
@J , Oil is a commodity. Shell oil and all oil companies own reserves in the ground. The market sets the price. I'm not saying it's a perfect system, but it amazes me how well-read people reading the New York Times, cannot understand this simple fact.
Charles (New York)
@Henry Porter I think the well-read section understands this well. It's the majority of the American public with their "price of a gallon of gas" economic IQ that does not understand that oil companies, like dairy farmers, know that it's not in their benefit to overproduce a product that is either nonessential or, essential and has no real competitive substitute. Enter green renewables.
Louise (S.E. Michigan)
@Charles Yes, I was making that point yesterday. I was responding to a question about the huge increase in a neighbor person's budget billing on her utility bill for the upcoming year. She had no idea what the global price of oil a gas had to do with it! explanation. I spent half my morning trying to explain economics 101. I also explained how getting independent of the global oil and gas industry with investments in Green Energy and the the like would be helping in the future with her energy bills. I then explained how the Inflation Reduction Act by the Democrats would help in the future. By the time I was done, I felt like a campaign ad!
Ernest Mc (Middlebury, VT)
Wow, the reporter here sure struggled to squeeze every drop of negativity out of what seems to be a rather strong report. The question is why?
MJN (Wardsboro VT)
Look at the Fed chart on interest rates. At the end of 2018 and beginning of 2019 Powell and the Fed were raising interest rates. Trump had a nutty and Powell and the Fed blinked and decreased the rates to near zero again. If only they had the stones to take on Trump. We might not be in this situation now.
Smilodon7 I (Gilead, The State Formerly Known As Missouri)
But we would. There still would have been a pandemic and the war in Ukraine.
Jorge (USA)
President Biden was just on TV boasting that "things are great," after earlier claiming the American economy is "strong as hell." What malarchey! Americans like a fighter, and are at heart optimists. But this economic "denialism" is a heartless rebuke of their own personal truths. Voters want straight talk and facts, not gaslighting, when it comes to these high-stakes issues -- inflation, failing schools, another strain of covid and the failure of vaccines, masks and shutdowns, crime, guns, gangs, homeless encampments, millions of unskilled migrants flooding across our the broken border, fentanyl, the threat of nuclear war... And "things are great?" The stakes are too high to accept yet more partisan buck passing and denial, from a guy who won election because he was a moderate and knew how to get things done. The buck stops at Biden's desk, bit it is shrinking, and I hope he grabs it before it disappears like the Cheshire cat...
James (Texas)
Real wages falling, inflation at 40 year high, shortages, stagnant economy, retirement funds plummeting, return to net energy dependence, rising crime, record southern migration and Biden hails the economy. No one is stupid enough to fall for that. Socialism works until you run out of other people's money. Where do you think American wealth originates from? From businesses large and small. Not from the government or the criminals. If you have no businesses, you have no one to tax, no one to supply what you need, no one to pay for your medical, no one to pay workers, no retirement savings, no Medicare, Medicaid and no social security. Think about that. Sure, I understand that Biden hands out money and favors to buy votes, but we need to think about what is right around the corner. It isn't sustainable
Louise (S.E. Michigan)
@James Actually, the fact of the matter is that Socialism does work as long as you couple it with democracy. Denmark, a Socialist Country has more millionaires per capita then the United States. So does Finland and Sweden. Germany, who have had the Social Democrats in power for years has the strongest economy in Europe. Where you have failing economies is where there are Autocrats or Dictators in power linked to a police state! Whether the Police State is linked to the far right or far left, it always ends up in economic failure eventually. It is shared prosperity and shared ideas that economic success and happiness is achieved. Those European Democracies also have the highest level of personal happiness in the world as measured by social scientists. Trickle Down Economics has proven to be a failed experiment that leads to unhappiness and division, plus great income inequality!
Navneet (Boston)
@James Good thing is young people like me don’t believe in your trickle down economics in majority. And I make 6 figures.
Smilodon7 I (Gilead, The State Formerly Known As Missouri)
Please. We have never tried anything remotely close to socialism in this country. Give it up.
Charlie YoungI (Fairfax,Virginia)
U.S. economy returns to growth in third quarter! Really? Good news! I hope it is true! I hope we will have a younger president! Not from Dover! Joe Biden is too old to be president! We need a younger leader in America!
Bob (Bell County)
Blaming inflation on strong consumer demand while ignoring quarterly earnings is disingenuous. Demand isn’t up, “pricing power” is. Earnings are up as demand has sagged. These margins have been key inflation drivers. Energy. “Shell reported earnings of $9.5 billion, its second-highest profit on record.” (NYT) “Retail gasoline prices go up like a rocket, and fall like a feather.” Food, Durable Items, etc. “... in the last two days, we learned that IBM, Caterpillar, Coca-Cola, Harley Davidson and Wells Fargo all reported strong second-quarter results.” (CBS) Recent inflationary pressures center on a pandemic echo from auto industry production delays, housing shortages caused by corporate equity investment, brittle supply chains, geopolitical instability (Russia), and finally, profit taking.
James Byerly (Cincinnati)
Wish list: get an agreement with other top tier publications about whether you will emphasize year-over-year data, or monthly or quarterly data. It's confusing! And this is exacerbated by parallel and different decisions to emphasize year-over-year as opposed to monthly/quarterly data for inflation reports (looking at you NYT). Do your readers a favor and stick to one or the other. Not saying you shouldn't give both numbers, but the lead should be consistent. Headline readers might ask: was the increase .6 or 2.6%?
Tom (Noyo Harbor)
In 2016 economists projected 3% GDP growth for 2017. But, the average GDP growth for Trump's 3 years (2017-2019) before Covid 19 was 2/10 of 1% greater than the last 3 years of Obama's 2.3%. In Trump's 4th year GDP collapsed by -3.40%. That made overall GDP growth .98% for Trump's 4 years. So, as long as Biden is being blamed for the worldwide phenomenon of inflation let's put a 2.5% growth rate up against Trumpenomics before we scream about the sky falling. This is crazy because presidents have no direct power over the economy. They can do big stupid things like tossing out the pandemic response plan developed by two previous administrations and downplaying the Covid pandemic early on (Trump is on tape saying he downplayed it.). And those be stupid things do harm the economy and the rest of society. But business is controlled by private enterprise in the US.
Diotema1 (Southwest)
Contrary to so much propaganda, the Biden Administration has being doing business. Also keeping the world , er, safe for the best version of democracy we can muster. Prefer Xi or Putin or Orban?
gschultens (Belleville, ON, Canada)
@Diotema1 It looks like many in the GOP would prefer at least one, if not more, of tha rouge's gallery.
Smilodon7 I (Gilead, The State Formerly Known As Missouri)
The GOP thinks Orban is just great.
Charlie YoungI (Fairfax,Virginia)
US economy returned to growth in recent months? Really? Let’s wait and see! I already gave up hope about Joe Biden! A Dover guy as our president? Who will be our president in 2024? Donald Trump?
Sydney (Chicago)
Turkey's inflation rate is something like 82%. Isn't Dr. Oz Turkish? By Republican logic, inflation is Dr. Oz's fault.
Twg (NV)
The growth is good news, the fact that the labor market is still healthy is good news. Although inflation remains high, reports from both August and September do show that trend is reversing. Yes, higher rates have had an impact on housing, but the housing market has been absolutely nuts for several years, because of artificially low interest rates and the aggressive purchasing of housing stock by private equity across the country, which blocks entry by locals, and 1st time buyers, into their housing markets. When the median price for a house in the U.S. is over $470,000 you know our housing system is broken and in need of reform. A slow down is inevitable. Many large companies have announced staff cuts, hiring freezes, and restrained outlooks for the 4th Q. When you read that Americans are saving less and using their credit cards more, despite the outrageous usury rates our government allows banks to charge, that's a strong indication consumers are pulling back. Interest rates are such a crude and limited tool to fight inflation. Food prices are going up because of the war in Ukraine, and the historic droughts impacting farmers across the world. Just look at CA that feeds so much of the U.S. (I also think price gouging is taking place.) Still, overall, Biden's policies and the FED, have kept us away from economic ruin ever since Covid hit. I hope the worst of inflation is behind us. And I hope the FED after November slows its pace of rate increases.
Brandon (Oregon)
All of this is bad for the working class and great for the owner class. Raising interest rates just hurts working Americans. Only a Capitalist economist and the wealthy they serve, would find any of this uplifting
Bill Brasky (USA)
Could the Federal Reserve actually be pulling off a soft landing and reset setting the he stage for reduced inflation and economic growth?
Uly (New Jersey)
The graph shows increases in GDP. I don’t trust politicians especially GOP. Powell is the go to dude.
LaurenceB. (Portland Oregon)
The report was taken as welcome news by Biden and many others, but The Fed will look at it and see more inflation coming and will continue to raise rates by a at least a half percent and they will do that until they are thoroughly convinced that the economy has slowed enough to control inflation. Good news is bad news here and like it or not we will end up in a significant recession.
Bill Smith (Dallas TX)
The point being, all the economists are just guessing. They don't have any idea where the economy is going. But they still prognosticate, often with hyper doom-and-gloom, self-fulfilling prophecy. And it all grabs the headlines.
Caesius (LINY)
@Bill Smith Exactly. Economics is not as scientific as the "experts" and esp. their leashed dogs (politicians) like to act. Economists invented most of what they deem dogma...wholly to keep money in the hands of the monied, and mostly out of the hands of the working classes. They are also operating on the "tenets" that are based on the good old days, when markets were smaller, more controllable, and mostly based in the US, and a few Western allies. Globalism blew it all apart, like the Big Bang! Where expansion can't be contained, cant be tweaked here, and there, and not expect bulges all over the place. They're trying to control all the horses, along with every other beast that escaped from the barns, styes, coops and cages...they all loose...with no interest in going back in. Running on deficits was supposed to be impossible. Oops!
Park Bench (Washington DC)
The 2 successive quarters of decline didn’t count as a recession, however brief? Because Biden said so? Not like the last one is going to make anybody feel great either.
Tamas (CA)
@Park Bench : Two successive quarters of decline is not a definition of a recession. You may want to look up who defines recession and the factors that largely define it.
David Parsons (San Francisco)
The absurd narrative suggesting the economy is problematic is self-serving. In the 3rd quarter, banks reported record earnings, but CEO's cut reported quarterly earnings by hundreds of millions because they all claimed, "bad feelings." That is called earnings manipulation based on the most subjective measures, unnecessary because of a FASB accounting change called CECL. 3.5% unemployment is outstanding. 2.6% real GDP is above trend. President Biden cut the annual budget in half to $1.4 trillion, after 4 years of Trump's 8 trillion in budget deficits without investments in infrastructure, climate change, or his wall that fell over in the wind. Finally, inflation is global, much worse in other countries, coming down, and central banks operate monetary policy separate from the Executive branch in every advanced country. I guess MAGA Republicans who believe in QAnon, finance domestic terrorists who attempt to overturn American democracy, and your former leader fomented Insurrection, insurgency, violated the Espionage Act, committed fraud, and Obstructed Justice, you can't run on facts and truth.
CH (Atlanta)
@David Parsons That's great, man. Nobody cares though when they're paying $5 for a carton of eggs. People who aren't coastal elites aren't doing well.
Smilodon7 I (Gilead, The State Formerly Known As Missouri)
But you aren’t going to do better with the Republicans. If you are hurting now, none of their policies will help you at all. Just because they say they are better on the economy doesn’t make it so.
Stagflation is setting in.
W.A. Spitzer (Faywood, NM)
@RP .....Maybe, but the U.S. added more than 260,000 jobs in September, the unemployment rate is at an historic low of 3.5%, and the dollar has steadily been gaining value against foreign currencies. Given where other countries are those are pretty positive numbers.
A Patriotic American (USA)
@RP You clearly don't understand what "stagflation" means, sir. Stagflation is a period when slow economic growth and *joblessness* coincide with rising inflation. Inflation is falling, albeit slowly. Unemployment reached notable peaks of 10.8% in November 1982 and 14.7% in April 2020. Currently, unemployment is 3.5%. Millions of job openings are available. Unemployment is NOT rising. This refutes your statement regarding Stagflation. Perhaps you should have stayed awake in College Economics, sir.
@A Patriotic American Do you think that the Fed is fooling when they say the unemployment rate must rise to reduce inflation?
Left-Right (Sacramento Valley CA)
Infinite growth in a finite world is impossible.
travis (NYC)
@Left-Right They only care about now not 100 years into the future. Heck they can't even feel good about tomorrow.
passepartout (Houston)
@Left-Right The most cogent comment yet.
Kamyab (Brooklyn)
it would be great if there was a rating for reporters, especially economic reporters, which would reflect the accuracy, and their opinions coming true. This report, for example, has little to say about productivity which fell the last two years, contributing to cost of labor, and thus inflation. Nor does it mention huge corporate profits. Former will come back up, and the latter needs addressing by regulation or other customer measures. Thus the predictions are quite meaningless. There is more dramatic expressions here than informative analysis. So, starting with reporting quality, 2 out of 10, assuming he got his name right and Bidens. Prediction is pending. I will evaluate it in three months.
David Parsons (San Francisco)
Cut all of Trump's disastrous illegal WTO double digit tariffs. American producers would rather reach 8 billion consumers than 330 million, and Americans would rather get higher quality products at lower prices, especially with all the corporate price gauging from a lack of competition.
Bob (Spring Hill, Tn.)
@David Parsons --How about we tear up all those trade agreements and slap huge tariffs on everything, especially junk from Mexico.
Blue State Blues (NY, NY)
Yay now it will crash again next quarter as most economists expect. Interest rates are already the highest they have been in over 20 years and they are still going to go up. Moreover, inflation pressures will continue due to the trillions of go government spending that hasn't even hit the books yet. Great job democrats!
Sydney (Chicago)
@Blue State Blues Glad you recognized it. It is a good job. My life is better now than it ever was under GW Bush or Donald Trump. Much better in fact, which is why I voted for all Democrats up and down ballot. Let's go Democrats!
Mari (Left Coast)
@Blues, gee…disappointed?! We are still adding jobs. The economy is growing. The Global Inflation is exactly that GLOBAL! Caused by the good old laws of capitalism: supply and demand! We will survive this, but not the destruction of democracy!
W.A. Spitzer (Faywood, NM)
@Blue State Blues ..."Great job democrats!"...So far Biden has cut the budget deficit he inherited from Trump, 260,000 jobs were added last month, unemployment is at an historic low of 3.5%, and the dollar has been steadily gaining strength against foreign currencies. Inflation is definitely a problem, but it is even higher in the EU, which would suggest to most people that inflation is an international problem and not specifically associated with the Biden Administration. Like it or not, those are facts.
Brian Barrett (New jersey)
Great news. I assume the .6 is the actual rate for the third quarter, which would equate to about 2.6% as an annual rate. Just about the long term average for deveoped nations. Combined with the inflation rate for the last quarter of about .2-.3% or about 1.0 to 2.0 % per year, we are doing quite well especially when compared to the rest of the world. I realy wish that these numbers were reported on a consistent basis: Monthly, Quarterly and Year on Year for inflation and Quarterly and Year on Year for GDP Growth. That way we give the republicans no wiggle room to cherry pick their stat of choice.
Brian Barrett (New jersey)
@Jorge Yes the glass is half empty. The republicans have no ideas about how to cut inflation and we play into their hands by admitting there is a problem and that the steps taken to fix it are working. Just take an impartial look at the graph. The .6% bar is better (ie. higher) than 70% of the quarterly numbers shown on the graph. That is something to be happy about unless like most gop'ers you really don't want the number and the reality to be good.
W.A. Spitzer (Faywood, NM)
@Jorge ....When was the last time unemployment was at 3.5%?
Jorge (USA)
@W.A. Spitzer Uh, when was the last time that millions of people -- many of early retirees, stay at home Moms, but many of them young men -- dropped out of the labor force? In September, the participation rate was 62.3% -- more a full percentage point below the level just before the pandemic, in February 2020, of 63.4%. Businesses are trying desperately to hire workers, to no avail. Bragging about the low unemployment is a fraud, given the low participation rate, and inability of American business to ramp up from the covid shutdowns.
Madge (NE)
Nobody likes to give up the cheap money. I’ve been reading and listening to stories on inflation and rising interest rates for the past year. But rarely do any state plainly that the Fed had been keeping rates artificially low for years; interest rates were near zero when when the Fed began its increases. The Times is ever ready to run panicky headlines on inflation, and persists in finding the black cloud in any faint glimmer of good news. Personally, I’d like to read more stories exploring the components of some American companies’ astounding profits in spite of all our economic challenges.
Hankydooski (Oregon)
Yep, exactly, like Shell. 2nd highest profits EVER.
Jorge (USA)
@Hankydooski You will be delighted to hear that Shell Oil -- like several other major refiners -- has been pressured by the Biden administration, the EPA and the ESG movement to exit the oil refining business, and switch to ethanol production instead. Continued high prices for refined product in the US are largely due to the the refinery squeeze, not Putin. The high profits are coming after years of heavy losses in the refinery sector, a severe lack of capitol for expansion, and -- in the Biden years -- a push to abandon refinery in favor of "renewable" energy. Other than the PES Refinery closure in Phillie, which was shut down after an explosion and fire, about a million bbd has been removed from US refining capacity to satisfy environmental requirements to blend more ethanol into the nation's gas supply. Shell has shut down a 240,000-bpd refinery at Convent, Louisiana, and a major refinery in Martinez CA, in order to “transition to renewable energy resources” as the company embarks on a plan to achieve net-zero emissions by 2050. So no more high profits, EVER again.
Cort Johnson (Lake Havasu)
If Americans had the sense to look around the world they would find all the developing nations are in the same boat and many are in worse shape. Republicans have no answers and Democrats don't really have any either. This is a mostly worldwide problem and its going to take some time to work itself out - which is not good news for Americans who want problems solved yesterday.
Blue State Blues (NY, NY)
Democrats keep telling themselves that republicans have no answers. But democrats forget - they own the house, the senate, and the presidency. They own this economy - record inflation and all.
Karen (Bay Area)
Blue: We do not own the senate, due to two very conservative democrats, and the filibuster, which neither party will relinquish.
Joshua (Phoenix, AZ)
@Blue State Blues Nobody has any answers that would satisfy the American electorate. The only correct answer is "Wait until Fed raises rates,and then wait until the recession is over". Anyone that says they can fix the economy in less than a couple of years is most likely lying.
Bob (Texas)
Politicians love inflation, it makes seem more important and influential. Raising interest rates is having the opposite of the intended effect.
Tom (Noyo Harbor)
@Bob Reality is that inflation is death to politicians. There's no gain in influence if you're voted out because of it and if you're voted in as a reaction to inflation you have to hope that inflation, largely beyond the control of political process, actually decreases. Or, your goose will be cooked and there's no gain in influence from that.
Smilodon7 I (Gilead, The State Formerly Known As Missouri)
There is if you can blame it all on your opponent.
passepartout (Houston)
I do not see this as good news when the focus is on reducing price inflation.
Sydney (Chicago)
@passepartout Greedflation resulting in record corporate profits is driving prices up - especially gas.
Joe Barnett (Sacramento)
Supply side problems that cause inflation are not the same as demand side inflation problems. In one, people can't get what they need so they are forced to pay more for limited supply. In the other people are flush with money and buying excessively. Raising interest rates doesn't get trucks packed and on the road, it simply reduces the value of the middle class's biggest asset, their home. It drives the price of rents up. The Fed is botching this.
Tom (Bluffton SC)
What is growth? If the increase was due to inflation, then it wasn't growth at all.
Joshua (Phoenix, AZ)
@Tom It's not, REAL GDP is based on the actual value of goods and services produced, not on the dollar amount (so it's not due to inflation). https://www.bea.gov/news/2022/gross-domestic-product-third-quarter-2022-advance-estimate
W.A. Spitzer (Faywood, NM)
That may be what Fox News wants you to believe, but the growth in GDP takes inflation into account.
faivel1 (NYC)
The GOP loves the inflation these are facts: As you can see red states have the highest inflation State Score 1 Louisiana 48.2 2 Florida 50.2 3 Tennessee 50.3 4 Georgia 51.3 Are you proud of this score? Just for a second imagine what will happen if they take power after midterms, I know scary thoughts.
Raphael Sassower (Colorado)
Isn't the correct number 2.6%? If yes, time to change the cover story...
susan (7657)
First the Times reports gloom and doom Thursday AM then switches to a more optimistic tone by early afternoon.Why??WAPO was reporting optimism from the get go.All media should be reporting the facts..so how about it NY Times??
Miss Marple (New Zealand)
Please send Ukraine lots of long-range missiles so the free, democratic world can remain free, and your economy can continue to prosper in the future and so your children's children can live and prosper in a free, democratic U.S.A. thank you.
James (Texas)
@Miss Marple It would be better if Biden stopped using Ukrainians as political pawns and killing and punishing innocent people. The Democrats just rescinded a demand for a cease fire. For fear of making Biden look weak. There is nothing strong about having other people die, so that you can profit
Donna (New York City)
Could have been a positive article on some good economic news. But no. Economists are a gloomy bunch, umbrellas open even when its not raining.
Michael Balter (Portland)
Democrats are so cute. Like little puppies they pant and jump in excitement because growth is at 0.6 percent. (I have seen many times when at a later date numbers get tweaked, but let's not worry about that.) Note the giant 0 before the .6. The housing market is slowing at a rate faster than in recorded history. Other key indicators are all pointing down. We're heading for a deep recession. Hopefully a short one. But recession never-the-less. Watching Democrats grab hold of this weak and pathetic indicator and squeeze the dear life out of it like it was a long-lost child, is fun to watch.
Jules (California)
@Michael Balter Republicans are so cute. They enjoy seeing housing prices rise 25% per year due to unsustainably low interest rates.
NYWoman (NYC)
And Republicans keep predicting Armageddon in the face of facts because that is what they do. Any lies to defeat the Democrats. And by “Democrats,” I’m not sure who you’re referring to outside of this writer. Most Democrats I’ve read and heard are pretty happy about the economy.
Michael Balter (Portland)
@Jules I certainly never saw a single Democrat complain about a rising housing boom due to low-interest rates. Your party is in charge of those interest rates so I think maybe you don't know what you're talking about.
pjtawney (Colton. OR)
"but"? Wasn't the slow down the point of raising interest rates? Make up your mind Republican economists.
Mark (Co)
@pjtawney Slowing inflation was the point of raising interest rates. Slowing the economy is a side effect. If the economy did not slow, then more interest rate hikes are coming.
Paolo (Massachusetts)
You don't understand how resilient the American people are, especially in the Northeast. The price of home heating oil is way too high, and we are being price gouged, and we know it. So the smart American will not buy until the price drops. We have wood, coal, propane, electricity, solar, and lots of other ways of heating our homes. We are not suckers for Big Oil. You will soon see the price of home heating oil crash in November, because we are not going to buy it. If you are invested in it, you will soon be losing your money.
Alex (Halifax, N.S.)
I'm a boomer and I'm okay I sleep all night And I read all day. Wall Street Journal "GDP Bounce Might Soon Fade" New York Times "U.S. Economy Grew Sluggishly In Third Quarter" Washington Post "U.S. Economy Grows In Third Quarter, Reversing A Six-month Slump" The Rolling Stones "Well, what can a poor boy do?" -"Street Fighting Man"
David (Texas)
According to President Biden "the economy is strong" & "inflation is transitory". I would not trust anything coming from that White House till after the midterms.
SeeSay (Indy, IN)
Oooo, the GOP is gonna hate this! And 2 weeks before mid-terms. And of course banks and businesses, who desperately want the GOP, with their promise of deregulation and tax cuts, to win in November are going to poo-poo the significance of this increase. They have no reason to want Americans to be optimistic, not when they need their Republican mouthpieces in office.
Moonstone (TX)
The people of the United States do not know how to bear hardships anymore. Particularly economic. I grew into adulthood with double digit inflation and double digit mortgage rates. We cannot wish away a pandemic and a war that is involving the whole world. We cannot possibly believe that we can live our lives without having to make some sacrifices. The current situation is the result of a huge mistake, the election of an incompetent to the highest, most consequential position of the world. Trump and those who believed lies are responsible. It takes time for "radical" change to be felt and seen in our lives. Trump was the catalist for what is happening now. Business, billionaires and industry are controlling our economy and our lives. But the stakes are higher than they have ever been in world history. The common man (and women) have given away their voice and their lives to megalomaniacs.
Manny Regala (Pomona, So California)
If you have not send in your ballots yet, think about these economic news. - The economy is not collapsing. - Inflation slowed in the third quarter, as oil prices fell. - But oil prices have since rebounded somewhat, and prices for food, rent and other essentials continue to rise. Now, if you vote to give the GOP control of the house and the senate, this is what happens: - Big tax cuts for the rich - Improvements in infrastructure, transportation and the war against climate change will all be shelved
Michael (PA)
@Manny Regala Nah. At best congressional republicans can pass a tax cut through the House, but it won't pass the Senate b/c of filibuster rules. If passed under reconciliation then Biden will veto the bill. The climate and infrastructure bills, are now law. The money has been appropriated, and it in the pipeline so the only way to stop that is to pass a new law that rescinds the previous laws. Should republicans control congress in 2025 they Dems will block any revocation in the Senate. If reconciliation is used, then it's the same process the Dems used to pass the law.
ND (Upstate NY)
The appropriations for programs under IIJA and IRA could be cut back under R control. Claiming that out year funding for climate and infrastructure initiatives is guaranteed no matter who control Congress is at best naive, if not duplicitous.
Common cause (Western Massachusetts)
I find it odd how shortsighted economic forecasting is. The model that has been in place for decades had been based on long term trends. Recessions have often been at the level of bumps in the road that have seemed to self correct relatively rapidly. Instead of bemoaning that our economic performance is not better, we should be thankful that the economy is as good as it is and congratulating Biden for his smooth sailing through hurricanes of both physical and figurative natures. All the while, 1/2 our government representatives working to undermine every program the majority wishes to pass. The long term trends that have been put in place over years and sustained global prosperity have been blown to splinters. > 1,000,000 American died as a result of COVID. If each of those Americans generated an average of $40,000/yr of economic activity; at least $40 billion dollars of consumer spending is gone along with their share of productive economic activity: That price is a conservative figure. Supply chains shut for more than a year had to reopen resulting in widespread shortages. Price increases under the control of private businesses soared with individual greed behind many of the problems. Perhaps some are trying to make up for lost income. But, the oil companies are recording record profits. The mini-oil cartel Russia, Saudi Arabia and Iran (arch enemies of America) has worked to undermine our economy. Here's a shout out for the great job Biden has done.
Common cause (Western Massachusetts)
@Blue State Blues War on fossil fuels? At present, gas and oil flow only as much as the Saudis and Russians will allow. What is happening is the addition to our present fuels of new, cheaper and non-polluting sources of energy. That frees us from a great deal of price gouging going on at the pump. The markets will figure out how to proceed. Biden has just added a stimulus to a smarter future. We came out of the recession because Democrats initiated stimulus spending that saved the economy. (A standard approach to Recessions). We might fall back into a recession because the Republicans have opposed every effort to create jobs and lower the cost of living for Americans. Incidentally, one of the main allies of the Republicans in their efforts has been the Russians. Go figure!
Jeff (Brooklyn)
It’s humorous the spinning of data by politicians.
Blue State Blues (NY, NY)
Hilarious! We came out of a recession and most economists to go back into recession next quarter. Just imagine how much growth we could have had with less regulations put on the books, no tax increases on large or small businesses, and lower energy costs (aka no war on fossil fuels).
David (Texas)
Just to remind people, high interest rates, inflation and no baby food happened during a Democratic controlled administration, Senate & House. Time for a change!
Bob (Spring Hill, Tn.)
@David --Interest rates aren't that high, car loans and mortgages were in the double digits during Reagan's first term and it took the fed raising rates to get inflation under control that started in another GOP administration (Nixon's).
Charlie (New York City)
@David Just to remind people, since Reagan every time the Republicans have been in charge the U.S.'s federal deficit has grown and under the Democrats the deficit has gone down. The same thing is happening under Biden. Not time for a change!
Jules (California)
@David Higher mortgage rates should have happened years ago. The housing bubble has been out of control due to such low rates. Thankfully it's slowing down and prices are reflecting that. Trump helped prolong outrageous home prices by publicly berating Powell to hold down interest during an expanding economy. Trump also granted tax cuts to wealthy people when it was the last thing the economy needed. If you read the Times, you know inflation is a worldwide problem -- worse than the U.S. But hey. Well, you know, Texas.
Sendan (Manhattan Side)
Time reported - Mortgage rates barreled past the 7 percent mark on Thursday to their highest level since 2002… Now that was during the time GW Bush was in office and he attacked and started the Iraq war and another war in Afghanistan. Those two endless wars cost millions of lives. Trillions of dollars and debt and a world of hate and mayhem. Lets jot forget the tax giveaway to the rich and the cut in government relief. So yes high mortgage rates and the collapse of the economy. Thats how Republicans ride and govern. Vote Blue!
Jack Campbell (Cornwall On Hudson)
Mmmm. Interesting timing. We’ll see if it holds any weight with voters. Would it be pretentious to assume a lower crime rate article will be coming soon as well?
LarryAt27N (north-central Florida)
Many commenters at the Wall Street Journal site imply that this is fake news or a Biden-led manipulation of the true figures.
PhillyExPat (Bronx)
So wouldn't the economy be moving in the direction the Fed planned/hoped to wrestle down inflation? To raise rates to slow growth without throwing us into a recession, or make it a soft recession? Reading the article, it sounds like it is describing what was the intended result.
John (Hartford)
2.6% GDP growth is actually around the average over the last 40 years. Obviously, the jury is still out on whether the Fed can achieve a soft or softish landing. I'm reasonably optimistic personally.
Mark (Co)
Summing over the past three quarters the economy has eeked out a 0.35% growth. At least it is not negative (unless the fourth quarter tanks), but 0.35% is still a failure to thrive in an 8% inflation economy. Question: is the 2.6% properly adjusted for inflation? If not, we could still be shrinking. Because this is the last announcement before the mid-terms, I will take it with a huuuuge grain of salt. Adjustments to this number are due next months... after the mid-terms.
Arthur (Plymouth, MN)
Since when is an expanding economy a bad sign? Because it's not fast enough? Please! If Republicans cared about their country as much as they cared about power, maybe they would put their country first instead of obstructing helpful legislation and hoping for bad economic news. We'd be in better economic shape if they'd help rather than hinder and try to undermine democracy.
Buckyballs (Texas)
Makes me wonder why all the so-called pundits were whining about recession, the 'r' word, the sky was falling, and Biden was a failed president. It's sad when the media wants to make the news instead of reporting it. Nothing is 'fair and balanced' anymore. What will happen (excuse my HO) is as soon as gas prices fall and overall prices start dropping the economy will shrink but mainly because people are spending less for the same things. The so-called "pundits" will again argue there's a recession. Ignorance is bliss.
Joe Gonzales (Seaside, OR)
@Buckyballs I'm with your sentiment all the way. The MSM is in an all-out contest to publish a new Thesaurus of outrageous, misleading, biased, and loaded headlines that have nothing to do with reporting and everything to do with inciting anxiety and rampant fear. Casselman, by the way, "...writes about economics...:, but he is not an economist!
Kevin (Phoenix)
Don't put your house on the market if you tapped all that fake equity last year.
PacificNWer (Washington)
I would like to see a chart showing the largest profits of large corporations since 2020. I don't know if all of the rise in inflation is due to price fixing, but I think the NYT could investigate a little.
David (Texas)
@PacificNWer I don't think its price fixing or a conspiracy, its the result of increased labor costs from this administration and more regulations. The companies are passing it on to the consumer.
SeeSay (Indy, IN)
@David Those costs don't account for the high percentage of PROFIT -- that is what comes after you deduct all those expenses.
Moonstone (TX)
Baloney. Business profits have increased well above their increased costs. Nothing but misery can grow indefinitely. Capitalism as practiced in the USA is fatally flawed. The fed increasing interest is how they try to indirectly control this type of capitalism. And as we know, that doesn't necessarily work.
Tom (Cleveland)
Appears to be on par with what we saw from 2016-2019 when we had "the words greatest economy" according to those of a rightward persuasion. Guess we have the worlds greatest economy again. Thanks Biden and the Democrats!
David (Texas)
@Tom Thanks Joe and Kamala for the 7 percent interest rate on mortgages. I'm sure this will fire up our economy!!!
Margo (Atlanta)
@David I wasn't sure we could assign any of this to Harris's efforts.
Eric (Ohio)
@David Why do you want low interest rates? That just means we're in a recession. Do you want to be in a recession?
Dennis W (So. California)
I believe the U.S. economy has remained strong and will gain momentum in 2023. Inflation will subside and the job market will remain the best in 50 years. The 2 major parties have 2 distinct strategies going forward. One has proposed and passed legislation that has begun to positively impact the economic challenges we collectively faced. The other has thrown stones and promoted cultural issues while offering no real plans to address real issues. It should be an easy choice in the upcoming election, but it looks to be too close to call. My hope is that more rational people show up than those easily swayed by disinformation and fear.
mbl14 (NJ)
@Dennis W Easy call? How is it easy when both parties are horrible and actively destroying our country.
Registered Independent (California)
And mortgage interest rates are now over 7% for the first time in 20 years. Go Biden!
Tom (Cleveland)
@Registered Independent You want rates to be where they were when we had a recession and double digit unemployment? I'll take the higher mortgage rates and a healthy economy. Not sure why anyone would want recession level rates... Unless they're a partisan hack upset by some good news for the US economy
Arthur (Plymouth, MN)
@Registered Independent What's the GOP's plan to combat inflation? That's right, they don't have one. Enough of this disingenuous posturing. At least Democrats have a plan are working on moving in that direction instead of threatening to crash the world economy by refusing to raise the debt ceiling if they don't get huge cuts to Social Security and Medicare. Where do you think those mortgage rates will be then?
Mike (Michigan)
@Registered Independent The interest rate on my first condo (back in the 1970’s) was 16%…7%? Boo hoo.
Laurence P. (Nassau County, LI, NY)
I’m simply tired of hearing from the Fed, corporate CEOs and the financial media that we’re heading for a recession. That’s all they’re talking about because they won’t be happy until we have one. Then they can say - “See, I told you!” We’re recovering from a pandemic and pandemic induced supply shortages. The WORLD has high inflation, not just the USA. Improving wages is a positive things, except for those preferring to pay for slaves. Sorry Reps, Joe Biden didn’t cause the inflation, so please, present your growth plans, BEFORE Nov 8.
David (Los Angeles)
The markets are responding well to this news, up almost 300 points already. The angle of this article, though, would suggest otherwise? Not sure why that is.
Bruce B (New Mexico)
Inflation is a worldwide problem. The main causes of inflation are the following: The pandemic Supply chain issues High demand & low supply Corporate Greed (Price gouging) The war in Ukraine (oil, fertilizer, & food) Trade Barriers on Food Supplies by governments The following painful & unpopular actions are about the only things that can be taken to slow inflation down: Raise interest rates (might cause recession) Tax hike Spending cuts Republicans propose the same policies no matter what the situation is: Tax cuts for the wealthy Remove protections/regulations Cut social programs Privatize everything
@Bruce B Yes ... it's so obvious , yet the other side wants to pull their red hats down over their eyes and gripe, gripe, gripe.
bubba (TN)
This reminds me about the new they put out in 2020 about the GDP went up while much of the country was in lock-down
Sendan (Manhattan Side)
As voters go to fill-up at the gas pump they need to remind themselves that Shell and Total, energy giants, have reported a combined profits of twenty billion dollars for just the third quarter. Shell claims they are returning those profits to their shareholders as they are on a buyback spending spree: And Shell wont be paying a windfall tax because of their claim of money spent to buildout in the North sea. For the record its reported that these profits are directly related to Shell and Total filling-in where Russian oil and gas has collapsed. In the last quarter Shell reported over eleven billion in profit. These are the best profits making years for these energy giant. Inflation is not do to Biden’s spending and saving the economy. And that government spending has been notched at sixteen percent of overall inflation. It’s the giant corporations with greed and price gouging that is the big culprits of inflation. Another is the pandemic and the Russian War. Remember as the Times just reported, who has been anti-Biden from the start, Biden, and the Democrats have put our economy on “firm footing” unlike so many other countries. Time to get real. There is no such thing of what is called alternative facts. Time to Vote Blue.
mbl14 (NJ)
@Sendan I'll never vote Blue or Red as long as I live. Even thinking it makes me physically ill. How blind is the entire country?
MS (Idaho)
Ridiculous discussion. Here we are in the richest economy in the world and we are trying to find something to gripe about! Just stop it.
kenneth Ehrlich (New Orleans)
I would like to know why there was a 2.6% increase in GDP reported by the Washington Post and a 0.6% increase reported by the NYT. Don't you get the same numbers from the Budget Bureau.
@kenneth Ehrlich Quarterly vs. Annualized rate.
JSR (San Francisco)
I'm genuinely curious. When I first saw this article, it had a headline: "US Economy Grew Sluggishly in Third Quarter." Now the headline reads: "US Economy Returned to Growth in the Third Quarter." There two versions give entirely different impressions about how the economy's doing. How does a change like this get made? Who has to authorize it? Do wrists get slapped?
mbl14 (NJ)
@JSR NY Times frequently changes headlines now on their website in order to draw more readers in.
pjtawney (Colton. OR)
The economists are Republicans, but the paper isn't. Editors matter.
Joe (USA)
This is all good news.
Steven Wolfson JD, PhD (Dallas TX)
What? No recession? Aww, shucks! :-((
Todd (Arizona)
I have never known this country with so much angst for so little reason. I came to adulthood during the Reagan recession when there were mass layoffs, jobs there were paid $3.35 an hour, interest rates were 17% and few jobs had health insurance. Today, jobs are plentiful, wages are higher and rising and health insurance is a requirement under Obamacare. If we could get beyond hating each other for no reason, stop the assault on democracy and end the crazy culture wars, we would realize the US is in a great place vis a vis the rest of the world. We need to address housing, violence and crime, guns, drugs, the environment and education. We need to improve quality of life for all Americans, put Social Security and Medicare on a sound financial footing. We have to learn to love each other again. We can do this. It doesn’t have to be hard.
D (New York)
Min wage is barely more than double $3 lol.
Teddi (Portland Oregon)
As a small business that manufactures their own products, my company will probably do much better in 2023. Parts are scheduled to be more available at closer to normal pricing. That will lower prices and increase production. Covid was a once in 100 year event that was impossible to prepare for. It has taken some time for the aftershocks to stop so we could crawl out and rebuild. I am very optimistic that what we are experiencing will be short lived.
Gen-X (Rochester NY)
Is the new GDP measured in today’s dollars?
Gen-X (Rochester NY)
which has 6 pct of its value bitten off by the 8 pct annual inf
A Patriotic American (USA)
@Gen-X Yes it is. As is known by those of us who were awake in Econ 101.
True North (NWT)
@Gen-X No actually the GDP is measured in Pounds sterling.
Michael (Boston)
The first edition of this story after the release of the data, said we had weak growth. The report says that on an annualized basis the GDP grow 2.6%. From 1933 to 2021, the GDP under the other party policies and presidents has been 2.6%. Under the Democratic party policies and presidents the GDP growth has been 4.3% This isn't a small sample it is 88 years. For all the claims and political fighting about which party is better for us. The data is a very clear. It is the Democratic Party.
Doug Rife (Sarasota, FL)
The housing market crash is a result of Fed policy that has caused mortgage interest rates to soar. The S&P/Case-Shiller house price index fell for the first time since 2011 in July of this year when it fell by 0.5% and then fell again in August by 0.9%. That qualifies as a crash because housing prices rarely decline before adjusting for inflation. And what’s far worse than falling house prices is falling residential investment after adjusting for inflation. Real residential investment in the third quarter was 12.7% lower than in the third quarter of 2021. Residential investment includes all forms of new housing such as single family houses, condos and apartment buildings. There’s a particular reason related to inflation that explains why real estate is crashing and is arguably already in a deep recession. It’s the result of long term consumer inflation expectations remaining low despite high current inflation. In other words, consumers still expect that current high inflation will prove transitory. As a result, real mortgage interest rates are sky high. The real rate of interest equals the nominal rate minus expected inflation. Currently, the real 30-year mortgage rate is 5.5% based on a nominal rate of 7.5% minus long term expected inflation of 2%. The US has not seen real 30-year fixed mortgage interest rates this high since before the year 2000.
osavus (Browerville)
@Doug Rife Real estate prices in most of the U.S. are higher than they were 2 years ago so I wouldn't use the word "crash". Perhaps adjustment is a more appropriate term.
True North (NWT)
@osavus Or correction.
Tom Mariner (Long Island, New York)
You and I should believe absolutely nothing that comes out of our government or politicians until Election Day. Since "the economy" is an important campaign consideration, this should be discarded as the desperation move it is. Can our government cure inflation and insane energy prices? -- I hope so and trust they will, but we will have no clue until after November 8.
Am Brown (Spain)
@Tom Mariner Third quarter figures are facts.
Tom Mariner (Long Island, New York)
@Am Brown Yup, and two weeks and a day from now they can be an "oops". Talk to me then when the every-two-years "election of a lifetime" is over.
Howard Gregory (Hackensack, N.J.)
My gut tells me to continue to have faith in Mr. Powell, that he will help us lick this crisis-triggered inflation in a few more months. Given China’s ascendancy as an economic superpower and the inevitability of their eclipsing America as the world’s largest economy, our leaders must find a way to control inflation. This is because for roughly forty years our government has been redistributing wealth upward to the wealthy while leaving our social and physical infrastructures badly underfunded. This has put America behind China in the early rounds of The Second Cold War. The domestic investment made by President Biden and the current Democrat-led Congress to address some of our deteriorating infrastructure issues has been as inadequate for competing with China as it has been difficult to get through our closely divided Senate. If government social spending causes inflation at some level of spending, then our economists had better find a way to interrupt this causal relationship. If they cannot do this, China will eventually trounce us in The Second Cold War and become the most important economy in the world.
Todd (Arizona)
@Howard Gregory The China is ten feet tall fable is very destructive, and it has to do in anti-Asian racism. China does pose a threat in various areas, but China has more problems than it can possibly address. You are absolutely right that we finally have an industrial policy for the first time since WWII. Time is on the side of the US. There is room for peaceful competition with China. If the US is sensible, and deals with the irrational craziness that has possessed half the population, we’ll be the world’s preeminent power for the next hundred years.
Timothy F. (Des Moines)
Overheated economic growth and overvalued markets need corrections. We were doing great with Obama-7 years steady growth in all sectors and then TFG and his hand-picked Chair of the Fed got greedy and here we are. Just relax and let Dems do what they always do: Fix Republican mistakes.
galtsgultch (sugar loaf, ny)
Other than cutting the taxes for the socialists in red states that I already support with my federal tax, does the GOP have an actual economic policy? Or, does it remain point and say “bad”?
Sam (New York)
Interesting more positive slant than NY Times. Here's the Times of London headline on US GDP number: "Business US economy beats expectations with 2.6% growth" Same underlying data. What gives?
JC (California)
That's a 2.6 annualized growth rate, which is actually great after two quarters of negative growth...but I get that it doesn't fit the Times' narrative.
Lee (California)
NYT is using 0.6%, not the 2.6%. Just curious about other quarters NYT uses for comparison, the -1.6% and -0.6% for the first two quarters of 2022, were you comparing apples to apples?
EaglesPDX (Portland)
Nothing the Fed can do on monetary policy, basically raising interest rates, will affect current inflation because inflation is due to oil price manipulation by oil industry and supply issues from China. Inflation is from Trump/Putin/Saudi oil price hike of 2020 continuing on into '21 and '22. When Trump announced the brokered deal, oil jumped 40% and has climbed ever since. Take the oil industry war profiteering out and inflation is 5%. Take the China supply issue away (cars in short supply and selling for $10k over list price) and inflation is 3%. Increasing US industry rates INCREASES US INFLATION making the cost of everything on credit (homes, cars, education, food, housing) higher. It potentially bankrupts busineesses and people to bring down inflation. To day it is a crude tool is a wild understatement, it's no tool at all since it cannot fix the causes. Fed is just bludgeoning US workers with higher prices, job losses so the wealthy don't see their investments lose value.
Rob Wilson (Norcal)
Weakening housing market: A gradual return to reality is how I would put it.
Eugene Gorrin (Union, NJ)
The economy is growing, we’re not in a recession, and consumer spending is slowing. This is pretty much the path the Fed has taken by increasing interest rates to tame and bring down inflation and hopefully put the economy into a soft-landing rather than a recession. This was a good report. So far, so good.
Ordinary peoples like me do not feel any change in our economy. Inflation seems same or the prices of essential commodities are on the rise. It is strange the purchasing is not that slowed down except housing and automobile businesses. The retired peoples are in the worst shape. Their IRA savings or 401 or TDA accounts are decimated because of the continued stock market crush. Fed is hiking the rates like crazy which is not bringing any good result .
rjs7777 (NK)
@ASHRAF CHOWDHURY the Fed hiking rates will eventually bring inflation under control, which is essential to allow regular families to continue to be able to afford food and shelter. That is the good it brings.
Charlie (New York City)
Well maybe if the Republicans get back in power they'll cut us some more of those $300 checks that was W's big solution. That seems to be the only thing they've come up with for us ordinary peoples. [insert eyeroll here]
Ben Balcombe (New Hampshire)
@ASHRAF CHOWDHURY NYT reported a few days ago on Nestle and Proctor and Gamble earnings and both companies reported increased profits despited reduced sales and attributed that to price increases. Furthermore they plan to keep hiking prices to offset reducing sales or what they call "inflationary pressures"!
mona (Ann Arbor)
Less spending, less stuff purchased. Less stuff purchased, more lay-offs. Less housing being purchased, more rental demand with no inventory. More new home building to fill demand later down the road when everyone tries to buy at the same time again (and who knows when that will be) might be a good sign, but the Fed is out of its mind. Data versus real-world open your eyes to what is coming due to behavior is one of the reasons why we had the 2008 crash. Price gouging? Let's open that can of worms at the heart of inflation. Another day I guess.
Dave (Philly)
The chart seems to indicate pretty good growth during the Biden administration years. Just sayin'.
Margo (Atlanta)
@Dave What you mention needs to be qualified as coincident with covid recovery. Not necessarily the result of the policies of the current administration.
Kim (New England)
@Margo The point is that GOP can't use it against Biden. It's growth and it's during a Dem presidency. GOP likes to say growth only happens under their watch.
Buckley (London)
@Margo The recovery was fundamentally enabled through Biden policy though, in this case I think he can take credit. Now both Biden & Obama have demonstrated a rescue plan out of an economic crisis. You have to put your beliefs aside and put credit where it is due.
Carol Osler (Framingham, MA)
Ben -- You're a smart guy but your prose is confusing due to internal contradictions. You say: "while spending on services slowed but remained positive ... The slowdown in spending will be ...." Problem 1: Spending on services is positive by definition. Only the growth of spending can be negative. Problem 2: This contradicts two other statements in the same piece: * "Consumer spending, the bedrock of the U.S. economy, rose 0.4 percent in the third quarter, ..." * "Consumer spending has continued to increase despite ..."
Max T (New Haven, CT)
@Carol Osler On the subject of perceived “internal contradictions”: First of all, the author is referring to percent quarterly changes. Though this is slightly unclear in text, both the graph and references to percent changes show this. While negative spending on services may not be realistic, negative quarterly changes in consumer spending certainly are. In regards to your second problem, consumer spending consists of both goods and services, while spending on services is, well, just spending on services. You conflate the two. In both cases, the problems are in your comprehension of the article, rather than the article itself.
Allison (Texas)
If the dollar is down, that helps the export markets. And corporate earnings are still through the roof, thanks to their price gouging! I am still voting for freedom. Gas prices will go up and down, but I want to take back control over my own body from the state. The state is not entitled to tell me what I can or cannot do when it comes to making personal medical decisions. And I live in a state that’s telling me that it does, so voting for Democrats is all the more important to me.
Karen (Bay Area)
Allison, I’m well past my reproductive years, but like you, I’m a single issue voter now. Yes on legal, accessible, affordable abortions. As a working woman from the late 70s until 2019, I had to fight for and defend every success that ever came my way. Female advancement came to my generation in part because reproductive freedom changed our lives. The only people against abortion are republican pols who see this as a help to their electoral success. Evangelical and Catholic women who want us to be like them. Men jealous of women’s freedom and success.
Andy (San Francisco)
@Allison you already have 100% control over your body and can choose not to become pregnant! The rest of us should not be forced to support killing because someone lacks self control and personal responsibility!
Ben (Canton,NC)
Biden's blame game for high prices is wrong and beneath contempt. Truman said the "Buck Stops Here". With Biden and his spending enablers, everybody and anybody other than themselves are to blame. They have only themselves to blame - many from Larry Summers on gave them plenty of warning on inflation. Ideological blinders kept them from even seeing the damage government spending can do. And all their excuses from supply chains to the Ukrainian conflict are just that excuses.
CastleMan (Colorado)
@Ben, the President does not set prices. Corporations do. And the President does not establish the baseline interest rate in our economy, either. The Fed does. And the President does not determine federal spending. Congress does.
Cbadloc (Scotch Plains, NJ)
@Ben Trump voters giving us "buck stops here" lectures? Oy vey!
Marc (Houston)
@Ben Substitute Trump for Biden, and then you might be demonstrating that you are actually paying attention. Remind me again of when Trump took responsibility for anything?
Distraught Disaster (Los Angeles)
The “annualized rate” here is very misleading…if you look at the growth since the start of the year it is down.
Waz (Akron, OH)
@Distraught Disaster YTD rate is no more misleading than annualized rate. They cover different time periods.
Steve (Illinois)
@Distraught Disaster GDP has been reported as “annualized rate” for decades. It wouldn't make sense to change reporting methods now. It what way is do you find it misleading?
Sarah (Smith)
It’s clear from these comments that the economy is good for retired Boomers but no one else.
Metrojournalist (New York Area)
@Sarah You are so wrong. Boomers are suffering as much as everyone else, especially those born at the end of that generation. Many are unemployed or underemployed because of age discrimination. They've lived through double digit inflation and multiple recessions. Their retirement savings are worth less than expected. Many had no defined pension plans, but 401(k) plans to which they contributed the lion's share. And many are now retiring into this mess. So much for their golden years.
Margo (Atlanta)
@Sarah I don't see that. Retired boomers must be having a lot of sleepless nights as their savings are definitely affected, their cost of living rises just as it does for the rest of us.
Nick (Austin)
@Sarah It's been great for me and I'm a gen x'er.
northlander (Michigan)
So much for the “wall of worry”, more bricks.
Austin (Boise, Idaho)
Whatever. These rates aren't even close to what Paul Volcker did. Ever since the 08' crash we've living on years of cheap interest rates, government deficit spending, poor fed policy, and unsustainable stock market growth. Eventually we'd have to pay the piper. The quicker the fed gets more serious about hikes and a real recession hits the sooner we can move on. In the long run it'll be better than years of self perpetuating inflation/stagflation.
Jerome (Vermont)
@Austin This is the only adult non-partisan post I have read here and pretty much sums up the US economy over the past 2 decades in a few short sentences. Well done!
Harold Gollman (Madison, Wi)
It’s strange how the gdp has tanked at the end of each republican administration. Why do people think republicans are going to help the economy?
Ben Balcombe (New Hampshire)
@Harold Gollman If someone could answer this question it would likely fix everything. In polling the majority of people favour Democratic economic policies e.g. increasing tax on large corps, negotiation drug pricing, increasing minimum wage etc... but they also think Republicans do a better job managing the economy despite decades of data to the contrary. Maybe people just hear "tax cuts" and assume that will put more money in their pocket and that is all they care about?
Eric (Ohio)
@Ben Balcombe Republicans are often businessmen, and people look at them and think "yeah, that rich old guy is successful, he must understand the economy" Its really that simple. They don't understand most inherited their wealth, or became wealthy by duping gullible people into buying things they don't need. They don't know anything about economic policy, they're just great salesmen who know how to squeeze water from a rock (for themselves). And the American people have fallen for their sales pitch.
Arnold Satterthwait (San Diego)
As little of the Democrats budget, last year's budget, has been spent, doesn't this mean that Trump's huge 7.8 trillion dollar increase in the National Deficit that is working its way into the economy is having very little effect as one anticipates from the Republican's "trickle down" economics. Is this what the financial markets finally acknowledged when Liz Truss tried the "trickle down" con again in Britain and was summarily booted out. It seems that all we got from the "Trump" checks is a collision of printed money with pandemic and Putin related supply chain disruptions that have steeply raised interest rates the world over as new dollars fight for goods. Biden, Democrats and the Fed have been doing the right thing to restore the economy as seen by the record high employment rate. I anticipate a landing of sorts, soft or rocky, but definitely a landing, unless the Republicans are voted in again and continue their attempts to end Social Security and Medicare by shutting down the government.
firlfriend (usa)
There are still supply problems. Ships that are taking goods everywhere are getting stuck in the MS river. It is so low ships are becoming grounded since there is no water.
Michael Fremer (Wyckoff NJ)
Let’s see: PANIC about inflation, then the Fed raises interest rates to cool the economy and it works. Then it’s PANIC about a recession. Let’s PANIC about death because we have life.
Ghost Dansing (New York)
So, keep in mind they're trying to slow the economy in order to fight inflation.
Wild Thing (Oklahoma)
Pretty lame that the bedrock of the U.S. economy is consumer spending.
@Wild Thing Yes.. buying and selling are the transactions that make up the economy. What kind of spending would you prefer? Just government spending?
MJN (Wardsboro VT)
@Wild Thing That people are enjoying the fruits of their labor is lame?
L (Loc)
@MJN I mean, we're suffocating the planet with our "enjoyment." That has to be considered.
Louis Anthes (Long Beach, CA)
You can't reject two quarters of negative growth as an index of a recession and then accept one quarter of positive growth as the end of the recession that you rejected in the first place. If you feel you are in a recession, you're in a recession.
rjs7777 (NK)
@Louis Anthes I would rather say (as most educated countries do) that two quarters of real inflation adjusted decline is, by definition, a recession. And two quarters of real, inflation adjusted growth constitute the end of the recession. We are currently in a recession, and 2023 is likely to be either a long continuation of that recession, or a double dip.
Steve (Illinois)
@Louis Anthes You can reject two quarters of negative growth if the decrease is small and other economic indicators are strong.
Todd (Arizona)
@Louis Anthes A downturn is when your neighbor looses his job. A recession is when you lose yours.
GJW (Rocky Mountains)
Fed playbook…low rates to inflate the assets of the wealthy, then raise rates to further deflate the prospects of the poor. What a cruel system.
Charlie YoungI (Fairfax,Virginia)
I bought my first brick rambler in College Park. Maryland in 1960 and we paid 12 percent mortgage interest and we had no other choice! We bought it and later we refinance the mortgage loan and we paid 6 percent interest until today and we paid off the mortgage and are the owner of this rambler and we love it and no more worry! We will give the house to our grand daughter! She love the rambler! Three bedrooms and a big kitchen with a bay window!
Cincinnati (Cincinnati)
It’s so bad Shell is buying back stocks and Kroger is buying Albertsons, woe is me. Gapen has been saying the same thing all year.
Joinery Piling Up (Charlottesville)
@Cincinnati Whatever happened to anti-trust laws?
@Joinery Piling Up The huge Corporations can merge and acquire faster than the Gov can police them , especially when republicans are in power and their effort is nil.
CD Chase (San Diego CA)
Hmmmmm when the housing market was just a crisis because it was too hot now it’s a crisis as it cools. Calm down.
rjs7777 (NK)
@CD Chase Correct! The media consistently calls housing a “crisis” whether it is too low, too high or just right. Kind of like the debate between gentrification and urban blight. Between crime and the struggles of being prosecuted for your crimes. A tragic mindset no matter what life brings. While it makes sense that the media does it for financial reasons, it is too bad that people’s outlooks are influenced by this motive.
Machiavelli (Firenze)
No, it’s the negative, gloom, reporting by the media that is depressing people. NOT the economy which has lots of “ups” and some “downs.”
Margo (Atlanta)
@Machiavelli My grocery bill has a lot of ups. And that, in my view is a negative for me.
Max T (New Haven, CT)
@Machiavelli The “negative, gloom reporting” by the media is occurring because there are very real risks to the American (and global) economy right now. The pandemic and unprecedented financial stimulus put the economy into overdrive, and now the Fed is playing catch-up by raising rates. The economy has lots of ups and downs, yes, and they do occur regularly. But without proper action and regulation by the government, these ups and downs can have very real, very depressing effects on the average American.
@Margo Coupons ? comparison shopping ? Also - did you by any chance get thousands of dollars in stimulus checks to help you through the once a century pandemic ?
SXM (Newtown)
Now that the headline is corrected, people will be wondering what all these comments are about.
A Patriotic American (USA)
Well....that shoots down the idiotic theory that Larry Summers keeps parroting that "we are in a recession" every time he gets near a camera. Inflation is up. The Fed is raising rates to moderate it. GDP *will* slow as a result. Was I the only one awake in Econ 101?
SteveH (Zionsville, PA)
Meanwhile, another fossil fuel company posts record profits. Corporate profits are up everywhere. I guess we can't expect anything less. The rich will literally punish the rest of us until they get what they want. What a country!
Ash (Mt. Lebanon, PA)
I appreciate the heavy lifting that Casselman had to do to make good economic news sound bleak. The headline could just as accurately have been, "Biden policies spur economic growth and rein in inflation." But no, we have to make it look dire so that people give the GOP a chance to come in and cut more taxes for the wealthy, eliminate more corporate regulations, begin plans on a nationwide abortion ban, and conduct endless investigations into Hunter Biden.
Robert Pryor (NY)
It is unlikely that the economy will go into a recession. Employment is hovering around the full mark. The US and Western Europe are fighting a proxy war with Russia, and spending millions of dollars to keep the Russian bear in its cage. As long as the Ukraine is pushing the Russian out of Eastern and Southern Ukraine, there is no end in sight to this war.
Jack (Gotham)
Unfortunately, Good News (growth) is Bad News according to what the Fed is trying to achieve. Until we see mass layoffs and drop in spending, the Fed will keep raising interest rates. Powell is channeling Volcker from the late 1970s and won't stop until inflation is down. But it can take years.
MJN (Wardsboro VT)
@Jack It’s a little different now. Houses cost 3 to 4 times what they cost in the early 80’s so it’s doubtful we’ll see 16-18% mortgage rates.
Jack (Gotham)
My point is that the Fed or Washington will not admit (but definitely support) the fact that they are hoping for a drop in consumer spending and employment which fuels growth and profits. They wont stop correcting until you start seeing 100s of thousands of job losses per month. I don't disagree with you about rates going to 1980s levels, but now homes are 7 to 8x of median incomes now vs 4-5x income in the past. Affordability is very low but in order to correct it, entire sectors will be damaged. It happened before. 3-4 years of pain, followed by strong growth.
Ugly And Fat Git (Boulder, CO)
The current high prices are the result of oil crisis made in US by expanding NATO.
Ash (Mt. Lebanon, PA)
@Ugly And Fat Git Correction: the current high prices are the result of corporate profits.
C Ray (USA)
More like uncontrolled corporate greed
Todd (Arizona)
@Ugly And Fat Git That makes as much sense as saying high prices are a result of Netflix cancelling Lillehammer.
B D Duncan (Boston)
All we’ve heard about this year is how terrible the economy is. Yet between gas prices and inflation the roads are still jammed with cars (worse than pre-Covid where I am) and restaurants are still full. That is NOT what happened in 2008. The economy is still growing despite buckets of cold water being dumped on it by the fed. Where is the disconnect between actual economic performance and how people “feel” about the economy?
Karen (Bay Area)
B Duncan, Me too. The “bad” economy is grossly exaggerated. We were in Hawaii first week of October. Very busy restaurants, crowded airports, full hotels. We had a business meeting in napa last week, town was stuffed. We drove to Healdsburg, Sonoma County Sunday— lots of traffic. Went out for lunch the next day in tiny Forestville— mobbed. Our little town of residence thrives on festivals— all doing great. Etc.
Observer (USA)
@B D Duncan Not all recessions will be like 2008. A major difference between then and our current troubles that explains your observations of consumers' discretionary spending is that we weren't locked in our houses from '06-'07. We also found out last week that this spending is fueled by a mixture of new consumer debt and raiding the piggy bank. Consumer excess savings were estimates to have fallen from approx. $6.5T a year ago to only 10% of that sum now, per SMBC Nikko. So, once-in-a-lifetime government stimulus and stock market windfalls have mostly been inflated away in only a year. That's how bad the current situation is for many people out there right now, and it won't show up in this GDP reading that's been bolstered by a trade surplus. (It can also be argued that this current trade surplus is due to weakening stateside consumer and business demand.)
Austin (Boise, Idaho)
@B D Duncan Inflation is near 10% and our 401k balances are down 25%.... that hurts. It's becoming increasingly clear there is no soft landing left. Either the fed gets more aggressive on hikes to crush demand and create a (hopefully) short harsh recession or we face years of stagflation and self perpetuating inflation. Neither is looking good. So yes, the foundations of our economy are looking shaky right now.
Peggy Jo (St Louis)
Growth is growth and that's great. No need for the "sluggishly" in your notice.
Al M (Norfolk Va)
@Peggy Jo Endless growth on a finite planet is a recipe for disaster. We need to focus on sustenance and living within our very real means.
mythocracy (indoctrinated)
@Al M Onus is on the citizens (us) though. Nothing will change as long as we beleive in maximizing profits and see stock market as panacea.
Jack (Midwest)
"President Joe Biden with a slim Democrat-majority Congress makes progress on steering world's largest economy toward sustainable growth. Consumer spending moderates, reducing inflationary pressures, while GDP still increases in a positive sign for economy. Republicans silent on plans of their own to fix inflation started by a pandemic their leader ignored and allowed to grow while the Democrats are already fixing their mess. Somehow half the country's voters are leaning towards the Republican party that caused economy to nearly collapse. Film at 11."
Vito (Sacramento)
@Jack isn't that the way it always seems to go? The Republicans help perpetuate an economic downturn, the Democrats come in and start a recovery and the voters want the Republicans back in.
Jack (Midwest)
@Vito Unfortunately so...
Mark McIntyre (Los Angeles)
Is this good news or bad news? It means the U.S. economy is still strong, but the Fed will keep raising interest rates until they see more signs of slowing. The danger is they will slam the brakes too hard and not only force recession, but possible stagflation like Britain and other countries are experiencing.
Jack (Midwest)
@Mark McIntyre It's a win-win for The Fed if they do. Their corporate buddies can cut expenses in response to the rising costs they themselves caused. Laid off workers helps boost Republican messaging to get them elected. Republicans in power pass on tax-cuts to the billionaires on the backs of the laid off workers.
Romeo (NYC)
All I see is that Fed is trying to kick the inevitable [recession] further down the road. When is the question, although many say it is happening right now, however until the stock market will (dare I say truly) reflect the state of the economy - its not here. Google Buffet indicator. QED
B D Duncan (Boston)
How is the fed kicking the recession down the road? They’ve been aggressively raising rates all year to cool the economy off. If they were trying to postpone a recession they would have kept rates low and cheap money flowing.
Thomas (nystate)
The stock market is a leading indicator. Your comment implies that it's a lagging indicator.
Neocenter (America)
"Consumer spending, the bedrock of the U.S. economy, rose just 0.4 percent in the third quarter, down from a 0.5 percent increase in the quarter before, as rapid inflation ate away at households’ spending power" Am I reading this right? It is still rising, and 0.4% and 0.5% is not that different to me. People are still lining up for $8 ice cream or $21 cocktail despite the inflation. Expect the fed to raise the rate by another .75%p.
Bob Chegamos (New York)
@Neocenter $21 cocktail? Even in NYC that would be a stretch at any good place.
Aaron (Ohio)
Of course you couldn’t just let it be good news could you. But when it’s bad inflation numbers you never hold back.
JJMt (Brookline, MA)
The point is that the economy grew. For the last two quarters it went down. Why do the editors always see the dark clouds in anything that’s good for Democrats!
Jack (Gotham)
Because any positive news in a high inflationary period means that the Fed will keep raising rates and add additional quarters of slowdowns, job losses, etc until inflation rate decreases. What the Fed is waiting for are massive job losses and decline in consumer spending.
Eric (Ohio)
@Jack Wildly incorrect. The Fed is not looking for massive job losses, they are just looking for a decline in spending. For example, I can put off buying a new car. That decision won't really affect my life but it will impact the economy if enough people make the same decision. If I lose my job, I can forget about the car and now will struggle to just buy basic necessities, which is really bad for the economy since I need to consume at least the basics to drive tax revenue and everyone else's salary. So no, they don't want massive job losses. They just want you to put off buying a new car and other superfluous items until prices can get under control.
mythocracy (indoctrinated)
Aren't we brainwashed with forever and reckless growth paradigm. Let's keep drinking growth koolaid and keep buying stuff we don't need with monies we don't have.
Furious (George)
The headline changed in the last 2 hours. Quite suspicious.
RG (Massachusetts)
The real reason we have stubborn inflation is due to the outrageous corporate profits that that exploited the pandemic to fleece consumers. But why let facts get in the way of blaming sleepy Joe.
Jack (Gotham)
Biden is most deserving for these corporate profits. Big businesses were essentially transferred over Trillions in a time when there was a shortage of consumer goods and raw materials. Most of the last installment of Covid relief checks went into investments and the rest was spent on consumer goods.
RG (Massachusetts)
@Jack Let me see if I can decode your comment. Filthy rich corporations stole trillions of dollars of covid relief money and plowed it into their profits margins, I mean "investments", and somehow, this is Biden's fault. That's a good one. I can't tell if you're a whacko "progressive" or a run of the mill MAGA dude. Not that ther's much difference when it comes to ragging on Biden. I'll let Rep. Katie Porter clean your clock: https://youtu.be/30_H33mS76Y
JMG (Brooklyn)
An economic system whose success is measured by continuous growth is not sustainable. To truly address the climate crisis, we need to emphasize different measures of success.
bbholidaypants (Duluth)
A rise in GDP is always a good sign but it should be reported side by side with an index of metrics providing indication of the economic impact of it in the everyday lives of Americans. I would expect there is a very great disconnect between the two.
Girish Kotwal (Louisville, KY)
Sluggish growth is better than no growth or a decline. It is hard to be optimistic when the Biden-Harris admin and the one party rule in Washington does not inspire confidence that they can do anything to put USA in the right direction. Since J20, 2021 a lot has happened that the state of the union of USA is not as good as it was before J20, 2021.
diana (state of Washington)
@Girish Kotwal throughout recent history it has been the republicans who have had authority when the economy has experienced a downturn and the democrats come into authority and create the correction and balance. clinton and obama are 2 examples of this. the economy started to struggle under trump and the prolonged and poorly addressed covid pandemic. how quickly we forget the obfuscation of duty by trump and the refrigerator trucks full of the dead due to covid. the only thing i can credit the trump administration with is his cabinet advocating for vaccine development. biden is pulling out all the stops to bring us back to a good economy but those who are not watching this investment are quick to blame biden for something that was a long time in the making and global in nature.
Renee M (CA)
@Girish Kotwal Trump-inspired propaganda. Funny how you forget what happened in 2020 under Trump, and conveniently don’t know, or don’t care, that the current financial and price-gouging problems are worldwide. Guess the truth doesn’t fit your narrative.
MidtownATL (Atlanta)
When the Republicans are in power, they call it economic growth. When the Democrats are in power, they call it inflation.
Paul (Brooklyn)
The end is near, repent ye economic sinners. All jokes aside it doesn't take a soothsayer or seer to see some type of recession is coming. We are already in one although not technically. When you start an insane trade war with friend and foe alike, massive deficit spending by everybody measured in trillions, unknowns like covid/Ukraine war, corporate welfare tax cuts in trillions to the deficit etc. etc. the end is near. The only question is when did it start and how bad will it be.
D.Harlem (NYC)
So, wondering here, where are the great ideas from the republicans running for office now about attacking inflation and the economy? I mean other than accusing democrats of not doing a good job with said economy...where are republicans ideas, real ideas beyond the usual tax cuts and having the supreme court allow the country to become the old west again with guns in every home?
Patrick (MA)
We need to acknowledge the Democrat party is the only one than can ensure continued inflation reduction for the economy. They are effective in helping us to understand that the root cause of runaway energy proces is Ukraine and Putin and Trump and greedy oil companies. Beyond that, they prevent shortages of key consumer items and keep tight control over Federal spending. Through their leadership, our economic future can continue to to look like the excellent results of the last two years. Vote Democrat and continue to enjoy their vision.
Magenta Libertarian (SF Bay Area)
@Patrick: They prevent shortages of key consumer items? Like baby formula?
Margo (Atlanta)
@Patrick You're going to have to tell us how "key consumer item" shortages are prevented by the current administration. Citation?
Philip Roberts (Portland, OR)
If GDP was aggressively growing...then "inflation is the threat." If it's declining, then "recession is the threat." While I am very far from from a pollyana- you can't have it both ways- the headline is misleading and there actual analysis weak.
Jay T (Texas)
How about a redo of that title substituting ‘Surprisingly’ for Sluggishly???
MKT Prof (NC)
What a pessimistic, slanted story. Look at the graph quarters since Biden was inaugurated. Compare the quarterly results with previous quarters. Does this look like a reason to jump off a nearby bridge? The Washington Post points out that the past quarter's performance would project to 2.6% annual growth. Moreover, the idea that one person, the President, is in charge of and responsible for our entire economy is ludicrous.
SridharC (New York)
I am glad you changed the headline. I hope the democrats are going to talk about the economy more.
Maria Luisa Castellanos (Miami, Florida)
We should be cheering and not writing such a ridiculous article telling us how terrible it is. Biden is doing a good job and you just want to tear him down!
Baxter Jones (Atlanta)
This is good news. We're not in a recession, which must be a terrible disappointment to FoxNews/TrumpWorld. Slow growth is just what we need; the fast, powerful growth of the past year was a significant factor driving inflation (along with Putin's war on Ukraine and Xi's shut down of China's economy).
Rick Sacks (Toronto)
I don't believe anything an economist for a bank says. Also, why is good news always immediately negated with a "but" that is worse than the good news. So close to the midterms why not just state the facts and not rely on greedy banks to tell you what's wrong with America.
Jonathan (USA)
We need to acknowledge the Democrats understand economics and are the only party than can ensure the continued growth and robustness of the economy. President Biden has achieved the economic growth that Trump only fantasized. President Biden has given us a record number of small business startups and a resurgence of American manufacturing. President Biden has given us record low unemployment and higher wages. A vote for Democrats is a vote for a strong United States. A vote for Republicans is a vote for recession and inflation.
Girish Kotwal (Louisville, KY)
@Jonathan USA Falsehoods and propaganda cannot gain any traction for the Democrats. A red wave is just an illusion until we see the results from the mid term elections. I am independent and will never ask anyone to vote the way partisans would want to vote. All I say is think for yourself, do your research and then vote.
Jack (Midwest)
@Jonathan I cast my early vote yesterday - straight party ticket for Democrats. Still haven't heard a single plan from Republicans to do anything better. I'm never going back to the Republican party as a voter at this rate.
Ryan Collay (Eugene Oregon)
A quick scan of the graph suggests that this was about the average growth since 2006…
Jonathan (USA)
@Ryan Collay A quick scan of the graph suggests that Republicans, if given the chance, will destroy our economy, throw more Americans into poverty and ensure that our schools graduate no one with the skills necessary to our continued growth.
James (Salem, MA)
As usual, positive economic data is portrayed as not really positive, while negative data is played to the hilt. The economy clearly is mixed and slowly recovering from the pandemic, but it would be nice if the media in general did a better job of writing about what's going on in the economy
Jonathan (USA)
@James Okay > record low unemployment > a resurgence of domestic manufacturing > a record number of small business startups > higher wages
Ivan (Memphis, TN)
@James The media lives on making people scared. That is how they get the readers attention and readers attention produce the advertising dollars that sustains them. Fox news is the most gross example of "scare instead of inform". Unfortunately, no media I know of is completely devoid of that type of misleading.
Martin (Amsterdam)
@James The media depend on drama to engage their audience and so generate advertising revenue. The one story that still baffles me is the famous energy crisis. Energy prices crashed during Covid, rebounded in the second half of 2021, and have now returned below the levels of 2021 (and for oil, 2010-15). There was another brief blip from 24 February 2022, but that was smaller and short-lived, and has now played out. But all we hear is 'the energy crisis caused by Putin'. Putin's ilegal invasion is despicable, but there's no 'Putin energy crisis' even in Europe, with higher LNG shipping prices than the rest of the world. Most of the price volatility is due to the fact that most energy traded is never delivered. It's just chips in a speculative casino. But that doesn't fit the lazy media-political echo-chamber, so back to Putin. Sells better.
Paul '52 (New York, NY)
Isn’t the “decline” in GDP in the first two quarters the result of federal spending cut by a trillion a year with Covid spending ended? The fact that we added 3 million jobs in those months surely makes that explanation sound. So “mere” 2.6% growth with spending down? Small wonder the market opened up 400 points. This is good news.
Goodbye America (The Remains)
One of the smartest Democratic senators, Sherrod Brown, from the red state of Ohio, was sounding the alarm yesterday. When job losses start, they are slow to stop. Inflation means less to people that can’t buy anything. Mortgages are high enough and higher education loans are now at 7.5 percent for parents. All this will go higher if the Fed ratchets up interest rates again. Job losses and more insolvent parents and students. But the Fed was created by billionaire bankers and corporations. they didn’t care in 1916, and they don’t now. Blame the workers and their “demand” for higher wages. Wake up, folks.
Zoned (NC)
How about an article on the misleading Republican attack ads that we are seeing here in our states? What about headlining the positives of this administration? 1. Bills passed, i.e infrastructure bill, despite Republicans purposefully, for political gain, blocking any progress Democrats may make to help the average American. Republicans who voted against these bills later claim responsibility for them when they help their constituents. 2. Gas prices were low during the last administration because of decreased demand during covid. In spite of Russia's attempts to raise our gas prices in retaliation for our support for Ukraine, this administration has kept them relatively low. 3. There is finally some movement in legislation addressing climate change. 4. The government can finally negotiate some pharmacy prices saving the taxpayer money. 5. The national debt has been reduced and is lower than when the previous president left office. 6. Tax bracket levels are being increased helping many Americans to fall in a lower tax bracket and save money. 7. Social Security is being increased to try to help keep up with inflation.
POW (Wa)
@Zoned They won't do that because gridlock and "division" sells more papers.
Tim (Minnesota)
Don't you love the financial media pundits. the 0.6, and 2.6 annual numbers are nothing short of miraculous given the doom and gloom. But the ink stained wretches basically say "sluggish". and terrible, and armageddon is coming. Which makes me wonder what they'd have said if the Q3 numbers they PREDICTED would have happened? For example a Q3 drop of .6, and annual number of -2.4? Would they have said the world is ending? Probably not...they'd have said "yeah, meh, just like we thought." But give them a positive number and it becomes. "we are the Titanic, we have no idea and the great depression looms". LOL. The message to me? Stop worrying. We're plugging along, and my retirement funds are recovering just like I knew they would.
Maria Luisa Castellanos (Miami, Florida)
@Tim You are so right. It seems that no matter the great news they want to tell us everything is awful. It's outrageous!
The End Is Where We Start From (Little Gidding)
How about we seriously tax those companies, like Shell, that doubled their profits from last year, while simultaneously telling us all that prices at the pump are due to inflation?
Sang Ze (Massachusetts)
@The End Is Where We Start From What? You really expect big corporations to pay their way in the USA? ~LOL
Zoned (NC)
@Sang Ze Recently read that some large corporations are raising their food prices so their profits aren't affected, even though many have profits in the billions. Why don't they take a little less and let the average American make ends meet?
W.A. Spitzer (Faywood, NM)
@The End Is Where We Start From .....Record profit is the wrong metric to use in evaluating corporate contribution to inflation. The real indicator is profit margin. Now if Shell also showed a record profit margin, then we have a problem that needs to be addressed.
Ziggy (PDX)
What am I missing? Wasn’t the goal of the Fed to slow the economy down?
Jonathan Crane (Miami Beach, FL)
0.6% quarterly growth, which translates to 2.6% annual growth is not sluggish. It's higher than average GDP growth has been this century. It's true that the details are less optimistic than the top-line number. The article makes this point. But the headline is simply wrong.
Ed (Hovey)
That was the intent of interest rate hikes.
MidtownATL (Atlanta)
And what is the Republican plan for the economy? - More tax cuts? Tax cuts will only exacerbate inflation.
Tim (Minnesota)
@MidtownATL If you give the WSJ editors what they want (GOP), it will be a U.S. financial meltdown in the offing.
TW (Oakland)
@MidtownATL What is the Democrats plan to tame inflation? Seriously all I hear here is that the Republicans don’t have a plan, but nothing about the Democrats plan. As far as I can see, the central bank is fighting inflation belatedly. In California we are giving billions more to people, which is inflationary, and pretty sure it’s the Democrats in charge. Next year we will have a huge budget shortfall as we are heavily dependent on taxing stock sales.
Tom (Cleveland)
@TW The Democrat plan is to let the central bank raise rates, and to continue to invest in projects like infrastructure and clean energy that give people jobs so they don't need to rely on government handouts, and we can all weather the inflated prices together until China can get back up to speed and send us a flood of cheap products that will bring down the price of everything. This is a long term plan that will end up saving our country billions (if not trillions) in the future and keep our economy strong in the face of high prices, which is what we have seen so far - a resilient economy that recovering from a huge jolt. The Republican plan is to stop all spending, cut Medicare and social security, and give everyone a tax cut (more money in pockets) which will just make inflation worse and set up our country for financial disaster in the next 2 decades, while leading to worse health outcomes and greater income inequality (which will stifle growth). Basically, the stunted 'growth' with high debt and deficits we saw under Trump, only worse because the poorest among us will continue to get poor, and they will turn desperate so crime will increase and children who can't feed themselves will suffer. Then they'll want to cut more programs and more taxes because the economy will still be bad. Notice how the economy always grows under democrats, and always shrinks (collapses) under Republicans?
AKJersey (New Jersey)
The US economy is growing. That is great news! The US economy has recovered from COVID, and the COVID-induced inflation is ending. Thank you, President Biden!
Shadlow Bancroft (TX)
@AKJersey Inflation is coming down too. Now if we all can just keep the Republicans away from a majority in either house of Congress we will be in great economic shape in two years time. Vote Dem.
EdgeBoomer (Southside Virginia)
Isn't it time we all admit Friedman's 60-year-old theory really isn't the end-all be-all of economics? Just because Congress, in an OPEC-driven moment of panic, passed the inflation buck to the Fed doesn't mean it made any more sense back then than it does[n't] now. The Fed has a cumbersomely blunt instrument, interest rates, with which to make the finest adjustments to the US economy. Aside from a near-century's worth of data showing minimal, if any, relationship between monetary supply and inflation, the Fed's only cure for a thriving economy is to throttle it back to an acceptable level of mediocrity. Too many people gainfully employed? Raise interest rates. External factors inescapably raising prices in some areas? Kill off whatever growth remains vulnerable to the Fed so the *average* inflation rate isn't threatening to incumbents. So, yay, our blinkered monetary policy is a success: The financial sector thrives while the real economy, after briefly flowering, gets pruned back in line. Is it any wonder real income growth in the US flatlined 50-some years ago... within months of the creation of the Fed's Dual Mandate?
Alex R. (Abilene TX)
Is this really wrong though? It follows basic macroeconomic concepts. Not everything is political...somethings are just a trend in a cycle.
Theo Baker (Catskill Ny)
No longer content to report the news, this paper turns everything into a narrative no one wants, and no one expects, save for those insiders who support the “narrative.” Ie Bankers and conservative sources.
Alex R. (Abilene TX)
@Theo Baker no one likes the narrative...but it follows the basic norms of the economic cycles.
Tim (Boston)
I'm reading on CNN and MSNC that the US GDP grew at 2.6% in Q3. Where is the .6 % number coming from?
Patrick (Steamboat Springs, CO)
@Tim Monthly change was 0.6, an annual rate of 2.6
BritInChicago (Chicago)
@Tim 2.6 is what you get if you annualize the 0.6 number, i.e. multiply it by 4, since it's a quarterly number.
Mike (Rural NY)
@Patrick No. Quarterly change .6, yearly 2.6
Altoon (Vermont)
The Washington Post reports 2.6% growth, "reversing a six-month slump".
MidtownATL (Atlanta)
If the revised growth numbers for Q1 and Q2 hold as negative numbers, then the NBER will declare that we were in a recession then. And now we have moved past it. That is the technical definition of a recession. Two consecutive quarters of negative growth (after the data is revised and finalized).
MLD (Boston)
Washington Post is reporting 2.6% growth. What's up with the difference here?
W.A. Spitzer (Faywood, NM)
@MLD ...4 X 0.65 = 2.6 ...four quarters = one year
M Andrew (FL)
If it grew at all then that is positive at this point.
Sharon (L.A.)
Today the market will tank!
Kevin (Alexandria, VA)
Is this right? all the other news outlets are saying the economy grew at 2.6 percent.
richard (the west)
Ultimately, just as every child does in adolescence, we'll have to learn to stop equating 'growth' with 'health'.
jkenb (Chicago)
I take this as good news. Inflation is lessening yet the economy is still, overall, growing. A soft landing is possible.
cdisf (SF)
The Fed isn’t causing the pain…the Fed is trying to stop the pain. If rates weren’t rising to stop what Biden has always called transitory inflation, people wouldn’t be able to feed their kids. Inflation was above 6% in 2021. Inflation was never transitory. Americans knew it then and we know it now. Rising gas prices in March 2022 just threw fuel on the fire. The single best thing Biden should do is stop denying the economic realty, apologize for not taking action sooner, and stop saying the economy is strong when everyone else in the country knows it’s not.
Tim (DC)
@cdisf - Your take is not within the bounds of reality. The economy is growing. Unemployment is exceedingly low. Inflation is in fact not out of control.
Julian Fernandez (Dallas, Texas)
@cdisf Poverty wages paid by those same corporations posting all-time record profits are causing the pain.
David (Florida)
@cdisf Rising gasoline prices theoretically should still not have fueled inflation. If anything they would have done the opposite as they would have reduced money which could have been spent on consumer goods. The problem was that Biden started releasing strategic reserves thus artificially lowering the price through the release of tax payer paid for gasoline to subsidize the fuel use of those loudly complaining because the V-8 gasoline F-250 pickup truck they bought for 70,000$ when fuel was 2$/gallon now costs them 200$ to fill and they live in a world of fantasy where gasoline prices never change (unlike the real world where they often fluctuate a few 100%. Yet now Biden is pumping the reserve out again providing greater subsidies to whoever wants it the most which will extend and increase inflation. And if the presidential dictate that student loans are to be transferred to the taxpayers the levels of inflation are sure to jump again and for even longer. For those claiming "expert economists" say it wont result in inflation, please look back over the past year. These are the same economists who said Biden's excessive spending wuld not lead to inflation, was transitory etc. They have been wrong on every call and will be on the student debt giveaways as well. Hopefully one of the students benefitting will take in my elderly neighbor whose rent is now too high to live on SS and is getting evicted as have helped all I can. It will hurt everyone of us struggling to survive.
RDV (Pennsylvania)
Well, the Mississippi River is falling to un-passable levels due to climate change which will likely degrade supply chains resulting in more persistent inflation. The supply chain problem is the kind of problem that raising interest rates doesn't address - and probably exacerbates. Nonetheless, the one-trick-pony Fed will march blindly forward and break the economy over the backs of America's working class....
Kenan Porobic (Charlotte)
Our economic output grew dramatically over the last period. We just haven't measured it correctly. We didn't pay attention to all those Facebook, Instagram, Tweeter and TikTok posts, all those taken selfies, all those comments on thousands web sites, all the streamed and watched content... Seriously, why the tech companies encourage the population to act in non-productive way? Why did we invest hundreds of billions of dollars in those corporation to spoil the young generations?
Looking On In NoPo (Portland, Oregon)
Because it is profitable…in the short run.
Isn't slowed growth exactly what we want? I'm confused... do we want housing prices rising rapidly or not? Isn't the fed explicitly trying to cool consumer spending? Seems like when we we see a wage growth headline the take is "inflation too high, Fed not doing enough" but when we see a price drop headline the take is "looming recessing, things bad"
stan (San Francisco)
@ESG GDP is adjusted for inflation
David (Florida)
@ESG It seems the government does not know what its different hands are doing. Biden keeps spreading more money out to buy votes e.g., his now second pumping out of strategic oil reserves, and his fiat degree that student loan defaulters will now be given money for nothing after the 900$/wk unemployment payments for the unemployable or others who never earned more then a few hundred $/wk. Yet on the other hand they have to keep raising rates to lower the inflationary impact of the handouts. So it seems now its a death spiral of rate hikes, then more cash giveaways which drives more inflation so rates are raised again, so then Biden et al. gives out more "help" in poorly directed free spending giveaways, leading again to yet more inflation. So then the Fed will raise rates again to limit the damage only t be met wit ore handouts. We will soon have a novel period of astronomical interest rates combined with astronomical amounts of inflation. The obvious end result being the total devaluation of US dollars and destruction of the economy in the US and across the world. We seriously are becoming a 3rd world nation more by the day.
Kim (New England)
@David If corporations paid living wages, less people would need the handouts. When the economy suffered, the corporations posted huge profits. Meanwhile, the GOP has no better plan for fixing anything (other than the elections). If we continue to let the corporations run this country, and the GOP keeps chipping away at democracy, we will indeed be in trouble.
Mark (Colorado)
This is exactly the sort of data the Fed is looking for as an indicator that their measures are working, and should be considered strongly in their upcoming meeting about whether to continue pushing too hard, as they have been, on rates. Meanwhile, the tone of this article is misleading. Our economy is in fact doing extremely well right now. Earnings from companies have largely been strong outside of big tech. There may in fact be no stronger economy on Earth right now.
Patricia (Ft Myers, FL)
@Mark Agreed. However, I suspect ones perception, i.e. economists, media, Wall Street could be based on whose ox is being gored at any given time.
Christopher (Colorado)
@Mark, let's be clear the tech companies still raked in profits that exceeded what every normal person in the world would consider "good," but the greedy tech companies expected/wanted to make more.
A Patriotic American (USA)
@Christopher Yes, they made money....hence the upward revision to the GDP. It can't go up if companies don't make money....
Alex (SF)
The Fed needs to slow down the rate hikes.
Emory (Atlanta)
@Alex Given the consumer willingness to expand credit debt, one more big hike is needed and then no more hikes. All that cash people got for COVID gave too big a pay down of credit.
TW (Oakland)
@Emory Exactly. Still far too much money in people’s bank accounts saved up over Covid. That money continues to be spent rapidly, driving inflation. Only time at these higher interest rates will cause inflation to go down. Will be a year, at least, more if We continue to give out money to ease inflation.
Everybody's Talking (USA)
@Emory So how much money did y'all get? Seems I spent 1g a long time ago. I'd have forgotten about it by now if it weren't for the comments section.
See also