What happened
The US economy is experiencing a boom, with personal consumption expenditures increasing by 0.9% in August, resulting in an additional $190.8 billion in spending. This growth is evident across various goods and services, including discretionary purchases such as motor vehicles and recreational goods.
The GDP revisions also indicate a strong economy, with second-quarter growth raised to a 2.2% annualized rate from 1.5%. The details of the revisions show that inflation-adjusted consumer spending grew at a 3.8% annualized pace in the second quarter, up from the earlier estimate of 3.4%.
The labor market is also showing unexpected strength, with the average unemployment rate at 4.25% and the economy adding an average of 80,000 jobs per month. This is higher than the expected average of 44,500 jobs per month.
However, despite the strong economic indicators, consumer confidence has dropped to a 12-year low, with the Conference Board's survey showing a decline in confidence for three consecutive months. The survey found that more consumers described business conditions as bad than good, and fewer said jobs were plentiful.
