According to the Wall Street journal, the U.S Gross domestic product grew by 2.8% in the quarter that ended in September 30. This is according to the data released by the Commerce department. The growth indicates an improvement from the 2.5% growth recorded in the second quarter. According to economists, the growth much of the growth was due to a one-time accumulation of inventory by businesses across the country.
There was reduced spending on equipment and software by business firms in the third quarter. According to economists interviewed in the Wall Street Journal, the government shutdown together with the holiday spending which expected in the final quarter of the year could slow down the GDP growth to around 2.2%. (Wall Street Journal, 2013)
According to the report, the economy had been recovering at a slow pace for the last four years mainly due to the slow growth in employment rates, reduced consumer confidence and weak orders at factories. In addition, companies have recorded low investments despite favorable conditions such as low interests and high profits.
One of the positive highlights of the report was an increase in real estate investment growth rates. The double- digit growth was a major boost to the economy. In addition, there was increased spending by local governments and the state, although consumer spending grew at a lower rate that the earlier quarters. For the last quarter of the year, economists had predicted that the growth would slow down by 0.3% due to the government shutdown whose effects were evident during the 3rd and 4th quarters of the year. Returns from investments made during the last quarter would materialize in the first quarter of 2014. (Wall Street, 2013)
The variables that determine the growth of GDP are the focus of this article. Government spending, consumer spending, government policies, taxation rates, and investments determine the level of national income. The spending behavior of Americans, according to this article, is a good analysis tool in economic recovery. Consumer spending in the third quarter of 2013 remained relatively weak. The debt ceiling and the government shutdown affected consumer spending.
In conclusion, the elements that make up the national income, measured by the GDP are evident in this article. Each of these elements affects the growth rate of the GDP. In addition, fiscal and monetary government policies also play a major role in GDP growth and general economic stability.
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