Amidst a general narrative that America’s economy is still recovering from the last recession, a recent report has shown minor but considerable growth due to an increase in personal consumption.
According to The New York Times, a report from the Commerce Department found that the American economy grew 1.5% in the third quarter of 2015, despite a slight deceleration in the economy during the previous quarter.
Experts say that the minor setback in the second quarter was largely due to economic turmoil overseas. However, increased spending by the American public has righted the ship, largely thanks to consumers spending about twice as much on things like furniture and health care in recent months.
Approximately 76% of Americans are living paycheck-to-paycheck, so the news of increased personal consumption is fairly surprising. Scott Clemons, chief investment strategist at Brown Brothers Harriman, believes that it’s one of the main reasons the economy experienced any growth at all.
“The good news is that the important engine of personal consumption remains strong,” said Clemons. “The headline data was slightly disappointing, but the persistent strength of personal consumption bodes well for a continued modest expansion in the U.S. economy.”
According to CNN Money, the growth rate outperformed the expectations of many predictive analysts. Before the report was released, the Atlanta Federal Reserve projected a growth rate of 0.9%. Bank of America was slightly more optimistic, forecasting 1.2% growth for the economy.
Just one year ago, Americans thought the recession was behind them for good. Third quarter growth rate in 2014 was a whopping 4.3%, though that number is largely due to the anemic state of the economy during previous fiscal quarters.
Scott Anderson, chief economist at Bank of the West in San Francisco, said that his bank had heightened expectations for the report, predicting a growth rate of 2.5%. He feels as if the results are still positive enough to build momentum going forward for the country, adding that “it bolsters the case that we will see a bounceback in growth.”
Regardless of one’s stance on corporate and governmental affairs, it’s hard to argue that the economy’s recent uptick doesn’t provide some hope for America’s future.