“The reports of my death are greatly exaggerated” is a famous Mark Twain quote – perhaps on the US economy would like to borrow for the time being!

It was less than a year ago when there was a constant drumbeat of market commentators and financial analysts predicting an imminent recession. They believed inflation would remain high and the Federal Reserve had already done irreversible harm to the labor market and economic growth by keeping rates too high for too long. The US economy was widely believed to be headed for a major slowdown and perhaps even a recession.

Looks like those reports of the US economy’s “death” were exaggerated! The Commerce Department released third quarter real (ie: adjusted for inflation) Gross Domestic Product figures this week, showing the US economy grew at a rate of 2.8% in the quarter. That is right in line with the 3% observed last quarter and further proof concerning the resiliency of the US economy post-pandemic.

The strength was driven in large part by robust consumer spending (grew at 3.7%, adjusted for inflation – the biggest gain in over a year and well ahead of Q2’s rate of 2.8%). With wages staying steady, inflation cooling, and the job market holding its own, US consumers continue to have money and they are spending it! Spending on goods increased 6% (up from 3% last quarter and concentrated on cars, auto parts, and prescription drugs) and spending on services rose 2.6% (focused on health care and dining/accommodations), largely in line with last quarter.

Other parts of the economy were more mixed based on this report. Businesses stepped up their investments in both equipment and intellectual property (likely AI build-out related). Government spending was also strong, with spending on defense contributing more over 0.5% to the quarterly GPD increase. Businesses did however slow down spending on buildings and housing contracted yet again as interest rates remained high.

All this to say, the American economy remains very strong and continues to defy the odds and show signs of true resiliency. While much is being debated about the country and the economy at the present moment, don’t let the rhetoric distract you from the clear signs of strength, including:

*Unemployment rate of 4.1%, lowest since 1968

*Inflation is back down to normal levels (2.2%)

*GDP growth is the best in the world (see above)

*Financial markets are at 71 year highs in 2024

As we enter the final week of the 2024 election, the campaigns are reaching a fever pitch. Regardless of which side we each fall on, I hope we can continue to share one key perspective – a deep love and admiration for America. Let us not lose sight how fortunate we all are to call this country home. Go America go!

Onward we go,