The U.S. economy grew at a 2.6% annual rate in the third quarter despite a slowdown in consumer spending during the summer amid high inflation and rising interest rates.
Consumer spending, the economy’s main engine, cooled from July to September compared with the previous quarter.
Some economists prefer to look at final sales to private domestic purchasers-a measure of consumer and business spending-rather than the total GDP number, as a gauge of underlying demand in the economy.
That measure inched up 0.1% in the third quarter after it rose at 0.5% rate in the second quarter and a 2.1% annual rate in the first quarter.
“Obviously, inflation is a bad guy, and it is hurting lots of consumers. But even with inflation, consumers are still out there spending and traveling and doing all the things that they do in their lives.”
CarMax, a used-car retailer, saw its profit drop by more than 50% in its most recent quarter as tough economic conditions weighed on consumers.
Higher prices, climbing interest rates and low consumer confidence “All led to a marketwide decline in used-auto sales,” he said.