Exports rose significantly, led by non-automotive capital goods, bolstered by favorable exchange rates and stable global demand. Federal government spending also surged, driven by increased defense expenditures. These factors collectively supported GDP but were counterbalanced by increases in imports, which exerted a net drag on the economic output.
Sectoral Declines and Inflation Trends
A downturn in private inventory investment and a larger decrease in residential fixed investment contributed to a slower pace of economic expansion compared to Q2. In particular, the cooling housing sector highlighted the impact of higher interest rates on residential investment, reducing consumer demand for new home purchases and renovations.
Inflation indicators revealed some relief as the price index for gross domestic purchases rose by 1.8%, down from 2.4% in the second quarter. The personal consumption expenditures (PCE) price…
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