Robust consumer spending boosts US third-quarter economic growth
www.reuters.com

... The U.S. economy grew at its fastest pace in two years in the third quarter, fueled by robust consumer spending, though momentum appears to have faded amid the rising cost of living and recent government shutdown.

The stronger-than-expected increase in gross domestic product last quarter, which was reported by the Commerce Department on Tuesday, also reflected solid growth in exports, which helped to shrink the trade deficit, as well as government spending and a still-solid pace of business investment in equipment and artificial intelligence products.

The increase in consumer spending was the fastest in nearly a year as households splurged on recreational goods and vehicles and traveled internationally.

Economists say higher-income households are driving spending, thanks to a stock market boom that has inflated household wealth, while middle- and lower-income households have mostly pulled back because of high inflation, partly blamed on President Donald Trump's import tariffs. This trend has created what is called a K-shaped economy.

Though the GDP report is outdated after being delayed by the 43-day federal government shutdown, economists said strong economic growth last quarter reduced the need for the Federal Reserve to cut interest rates again in January.

Inflation accelerated in the third quarter. ...