The U.S. economy grew a bit slower than expected from July through September, but inflation (the rise in prices) is slowing down, and people are spending a lot.
According to the Commerce Department's report, the U.S. economy grew at a 2.8% annual rate during this time, slightly below the 3% growth that experts had expected. For April through June, the economy grew 3%.
Consumer spending, which is when people buy goods and services, rose by 3.7% in the third quarter, up from 2.8% in the previous quarter. This spending makes up about two-thirds of the total economy.
Business investments increased by only 0.3%, as companies slowed down their inventories (stock of goods), and spending on homes went down more than before.
People's incomes grew by $221.3 billion from July to September, which is less than the $315.7 billion increase from the previous quarter. The amount of money people have after taxes, known as disposable income, rose by $166 billion, or 3.1%, down from a 5% rise the quarter before.
Personal savings were $1.04 trillion in the third quarter, a bit lower than the $1.13 trillion in the second quarter, and the savings rate also dropped from 5.2% to 4.8%.
Ryan Sweet, a chief economist, said the growth shows the economy is doing well, and inflation is cooling off. This is good news for the Federal Reserve (the Fed), which controls interest rates to help manage the economy.
Next week, the Federal Reserve is expected to lower interest rates by 0.25% after already lowering them by 0.5% in September. Recent job and price data have led experts to believe the Fed will choose this smaller cut, with the chance of another cut in December if the economy stays strong.
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