U.S. Economy: On Thursday the U.S. disclosed that gross domestic product (GDP) grew in the third quarter (Q3) by 2.6%, the highest growth since Q4 of 2021, after recording two consecutive quarters of contraction.
Despite GDP faring better in Q3 than it has managed in all of 2022, Elon Musk said that he expects the economy to struggle for some time, with a recession lasting until 2024.
U.S. markets reacted positively to the news, but only just, with the S&P500 up by 0.59%. Bitcoin seemed to barely acknowledge the announcement, trading in a 1% zone around $20,600.
This performance comes against a background of underwhelming performances in the technology sector. Meta is proving to be a particular drag on the market this week. The tech giant posted quarterly results on Wednesday night, causing stocks to fall by 22% on Thursday.
GDP Bounce Back a Glimmer of Optimism for Economy
The rise in U.S. GDP is providing some optimism in an otherwise gloomy environment. U.S. gross domestic product grew by 2.6% between July and Sept, performing markedly better than most economists had predicted.
Part of the reason for the reversal of U.S. performance is thanks to trade, as weakening consumer sentiment has reduced demand for imports.
That has caused some analysts to treat the latest figures with some degree of caution. Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania, was among those who found some cloud in the economy’s silver lining.
“The devil is in the details, and if you strip out trade, GDP will look a lot weaker than the headline number suggests,” Sweet told Reuters on Thursday. “We don’t have a recession in our baseline, but the risks are increasing – we’re going to need a little bit of luck.”
Sweet is not the only commentator who still believes a recession is likely and that a rise in GDP does not necessarily indicate the turnaround everyone is hoping for.
Elon Musk Has His Say on U.S. Economy
Elon Musk is never shy to offer his opinion. On Oct. 21, the Tesla founder was asked how long he predicted the U.S. recession would last.
Billionaire Musk responded, “Just guessing, but probably until spring of ‘24.”