The American economy grew at a 2.6% annualized pace in the third quarter of 2022, according to an advance estimate from the Bureau of Economic Analysis released Thursday.
Real gross domestic product (GDP), the sum of all final goods and services produced in the economy, increased between July and September following two straight months of decline. Indeed, the nation had met the rule-of-thumb definition of a recession, two consecutive quarters of negative growth, as the economy contracted at a 1.6% annualized rate in the first quarter and a 0.6% pace in the second quarter.
Higher levels of exports, consumer spending, nonresidential fixed investment, and new government spending contributed to the additional economic activity. “The increase in exports reflected increases in both goods and services,” the Bureau of Economic Analysis explained. “Within exports of goods, the leading contributors to the increase were industrial supplies and materials … and nonautomotive capital goods.”
The White House responded to the news by claiming that “doomsayers” had been “rooting for a downturn” while wrongly arguing that the nation was in a recession. When news of the two conservative quarters of negative growth broke earlier this year, the Biden administration dismissed recession worries and claimed that only an official determination from the National Bureau of Economic Research would mean that the nation was in a prolonged contraction.
“Now, we need to make more progress on our top economic challenge: bringing down high prices for American families. Even with our historic economic recovery, gas prices are falling — down $1.26 since the summer, and down over the last three weeks,” President Joe Biden said in a statement. “Congressional Republicans have a very different agenda — one that would drive up inflation and add to the deficit by cutting taxes for the wealthiest Americans and large corporations. It would raise the cost of prescription drugs, health care, and energy for American families. That failed economic vision is not the way to give families more breathing room and grow our economy so working families can get ahead.”
As the midterm elections approach in less than two weeks, the Republicans lead the Democrats by a sizable margin with respect to trust in handling the economy, according to a recent poll from ABC News and The Washington Post. Another survey from Rasmussen recently found that 60% of voters blame President Biden and his policies for “increased inflation,” while only 13% of respondents believe the White House has been successful in taming high price levels.
“Today we got further evidence that our economic recovery is continuing to power forward,” Biden said. “This is a testament to the resilience of the American people.”
Rising energy prices are a salient factor driving much of the inflationary pressures. Gas prices have soared from $2.38 per gallon to $3.76 per gallon since the inauguration of President Biden, according to data from AAA. Meanwhile, Biden has emphasized green energy while leasing less federal land for oil and gas drilling than any administration since the end of World War II. Biden also discontinued Keystone XL pipeline project expansions.
Among other economic phenomena, retirement savings have plummeted amid a languishing stock market, supply chain issues have limited the availability of consumer and commercial goods, and soaring mortgage rates have impacted housing affordability.