U.S. GDP up 2.6 percent in third quarter, but recession fears loom

People have meals at a restaurant in New York, the United States, March 7, 2022. (Xinhua/Wang Ying)

"Exports will soon fade and domestic demand is getting crushed under the weight of higher interest rates. We expect the economy to enter a mild recession in the first half of next year," an economist wrote.

WASHINGTON, Oct. 27 (Xinhua) -- The U.S. economy saw its first period of positive growth this year in the third quarter, according to data from the Bureau of Economic Analysis released Thursday.

U.S. third-quarter gross domestic product (GDP) - all the services and goods produced in the nation -- climbed at an annual rate of 2.6 percent. The advance estimate beat Dow Jones' expectations for a 2.3 percent increase.

That growth followed two back-to-back negative quarters, the technical definition of a recession.

GDP growth ticked upward because of a narrowing trade deficit, although economists do not expect this to occur in the next few quarters.

The gains also occurred because of growth in consumer spending, government spending and non-residential fixed investment.

Despite the good news, many experts expect a recession early next year.

"Overall, while the 2.6 percent rebound in the third quarter more than reversed the decline in the first half of the year, we don't expect this strength to be sustained," wrote Paul Ashworth, chief North America economist at Capital Economics, as reported in CNBC.

"Exports will soon fade and domestic demand is getting crushed under the weight of higher interest rates. We expect the economy to enter a mild recession in the first half of next year," Ashworth said.