US Economy Sees Fastest Growth In Two Years Despite Fed Rate Hikes

Robust consumer spending fuels record growth; however, economists warn of potential slowdown due to resumption of student loan repayments and higher interest rates.

The US economy is seeing its fastest growth in almost two years, mainly fueled by robust consumer spending and despite multiple rate hikes by the Federal Reserve.
The GDP is expected to have expanded at a 3.8% annual rate in the third quarter, marking an increase from a 2.1% growth rate in the April-June quarter.
Strong labor market conditions and growth of wages faster than inflation have attributed to the increased spending power of households. American spending habits are covering a wide range, from cars to concert tickets to restaurant meals.
However, the economy is predicted to slow in the fourth quarter as nearly 30 million people resumed student loan repayments this month, potentially limiting their spending capacity. Higher interest rates may also lead to a sluggish housing market.
Despite persistent inflation concerns and the possibility of further rate hikes, the Federal Reserve remains optimistic about the economy's resilience. If current trends continue, the central bank could slow inflation without causing a deep recession, a so-called 'soft landing'.