WASHINGTON, DC — Kentucky Representative John Yarmuth, Chair of the House Budget Committee, released the following statement today after the Bureau of Economic Analysis reported its initial estimate of third quarter gross domestic product (GDP) expanded 2.6% on an annualized basis:
“Today’s positive GDP report underscores the strength and resilience of our economy, as well as the success of our economic agenda in helping American workers, families, and small businesses get ahead,” said Yarmuth. “Driven by continued growth in consumer spending, increased exports, and business investment that exceeded expectations, today’s report reflects confidence in the U.S. economy and the effectiveness of the Democratic-led Congress.
“While Republicans openly root for recession and plot to crater the economy in a desperate attempt to gut Social Security and Medicare, Democrats have enacted historic legislation that is generating millions of good-paying jobs, repairing our roads and bridges, and creating new opportunities for Americans. As global inflation continues to strain household budgets, Democrats remain focused on lowering costs and helping families keep more of their hard-earned paychecks, while making sure the wealthy and large corporations pay their fair share.”
Additional points of note:
- GDP grew at a 2.6 percent annualized rate in Q3 after falling by 0.6 percent in Q2. This reading indicates that the economy is not in a recession and is continuing to grow.
- Real GDP has now recovered all the losses incurred by the declines in the first and second quarters, and the pandemic imbalance between goods and services that snarled supply chains is normalizing.
- The growth this quarter was driven by increases in exports, consumer spending, nonresidential fixed investment, and private inventory investment.
- Prices in Q3 fell substantially from 7.3 to 4.2 percent while core inflation remained nearly flat at 4.5 percent – significantly below inflation rates seen in other advanced economies around the world.
- From the New York Times, Republicans Denounce Inflation, but Few Economists Expect Their Plans to Help – “Many say some of what Republicans are proposing — including tax cuts for high earners and businesses — could actually make price pressures worse by pumping more money into the economy. ‘It is unlikely that any of the policies proposed by Republicans would meaningfully reduce inflation in 2023’…said Michael R. Strain, an economist at the conservative American Enterprise Institute.”
- Continued: “Two policies favored by Republicans — repealing a new minimum tax on large corporations included in the Inflation Reduction Act and extending some business tax cuts from Mr. Trump’s 2017 legislation — could collectively increase the federal budget deficit by about $90 billion next year…fully repealing the Inflation Reduction Act would also mean raising future costs for prescription drugs for seniors on Medicare, including for insulin, and potentially raising future electricity costs."