In a captivating twist just days before the presidential election, new data reveals the US economy expanded at a sturdy 2.8% pace in the third quarter. This fresh snapshot of economic health comes as voters grapple with whether to stick with Vice President Kamala Harris or pivot to a second Trump term.
The growth figure, while falling short of the forecasted 3.1%, extends a nearly two-year streak of economic expansion under the Biden administration. Consumer spending, a key engine of the economy, drove much of the third-quarter growth.
Inflation Challenges Persist as Growth Endures
The robustness of the expansion is especially striking given the aggressive campaign by the Federal Reserve to tame inflation. Policymakers rapidly hiked interest rates in a risky bid to cool the economy without triggering a recession – a feat many economists doubted was possible.
In a show of resilience, the US economy has notched positive growth in all but one quarter since the start of 2022. According to a closely watched gauge of sentiment:
Remarkably, recessions remain more a specter than reality for an inflation-embattled but still surging US economy. The Fed’s tightening has yet to take the steam out of the expansion.
– Chief US economist at a major bank
Perception vs Reality: Many Americans Don’t Feel the Growth
Still, the upbeat data belies the financial strains felt by many households. In a poll conducted last month:
- Nearly half of Americans mistakenly believe the economy is in a recession
- Sustained price increases continue to erode purchasing power and living standards
The split-screen economic picture – strong growth contrasted with stubborn inflation – has emerged as a key flashpoint in the presidential race. Donald Trump has assailed what he calls the Biden administration’s “job-destroying” policies. Kamala Harris has vowed to “keep fighting” to ease cost burdens on American families.
Upcoming Jobs Report Could Sway Undecided Voters
Ahead of Friday’s closely watched jobs report, the final one before election day, economists expect a gain of roughly 125,000 positions in October. That would mark a slowdown from September’s surprise surge of 250,000 jobs but still signal solid hiring despite strike impacts and hurricane disruptions.
How voters interpret the economic indicators, and whether they deem the recovery to be reaching their household finances, could prove pivotal at the ballot box. The White House is banking on Harris’s argument prevailing – that the expansion, while imperfect, puts the US on stronger footing than other embattled economies.
In almost any other presidency, an economy like this one would be a tailwind for the incumbent party. But given the pain of inflation, it’s an open question if voters will reward progress or opt for a different approach entirely.
– Veteran political strategist
With mere days until Americans head to the polls, the state of the economy hangs in the balance – and with it, divergent visions for the nation’s fiscal future. Whichever narrative voters embrace could tip the scales in a race that remains, much like the recovery itself, too close to call.
Ahead of Friday’s closely watched jobs report, the final one before election day, economists expect a gain of roughly 125,000 positions in October. That would mark a slowdown from September’s surprise surge of 250,000 jobs but still signal solid hiring despite strike impacts and hurricane disruptions.
How voters interpret the economic indicators, and whether they deem the recovery to be reaching their household finances, could prove pivotal at the ballot box. The White House is banking on Harris’s argument prevailing – that the expansion, while imperfect, puts the US on stronger footing than other embattled economies.
In almost any other presidency, an economy like this one would be a tailwind for the incumbent party. But given the pain of inflation, it’s an open question if voters will reward progress or opt for a different approach entirely.
– Veteran political strategist
With mere days until Americans head to the polls, the state of the economy hangs in the balance – and with it, divergent visions for the nation’s fiscal future. Whichever narrative voters embrace could tip the scales in a race that remains, much like the recovery itself, too close to call.
