The nation’s economy expanded at a robust 4.9% annual rate from July through September as Americans defied higher prices, rising interest rates and widespread forecasts of a recession to spend at a brisk pace.
The Commerce Department said the economy expanded last quarter at the fastest pace in nearly two years — and more than twice the 2.1% annual rate of the previous quarter.
Thursday’s report on the nation’s gross domestic product — the economy’s total output of goods and services — showed that consumers drove the acceleration, ramping up their spending on everything from cars to restaurant meals. Even though the painful inflation of the past two years has soured many people’s view of the economy, millions have remained willing to splurge on vacations, concert tickets and sports events.
I don’t think it’s misleading at all. An economy is good when companies do good. Companies do good when they make more profit. They make more profit by paying workers less.
So if the GDP grows, it’s because people on the bottom are getting squeezed even harder.
Maybe in the short term, but ultimately companies make profit when there are lots of consumers with the resources to buy their product. Squeezing employees makes them unable to consume as much, which slows the economy. Ten thousand people buying a $300 TV makes the company way more profit than ten millionaires buying a $30,000 TV.
GDP is a bumpy measure that tries to sum up a lot of complexity in one number, but over time (years) it grows faster when the middle class does well.
Then why bother looking at the number quarterly?