U.S. growth was strong last quarter. That is not the same as easier household bills. The BBC reported output rising at a 3.4% annualized pace in the three months through September, with personal spending up 3.8% and private investment up 19.4%, a jump analysts tied mainly to artificial intelligence.
CNBC, citing the Bureau of Economic Analysis on October 30, said equipment spending contributed 1.16 percentage points, about a third of the expansion, and information-processing equipment 0.86 points. It said the saving rate fell to 3.8% of disposable income in September, from 4.0% in August and 4.5% in July. CNBC also reported the PCE price index up 0.5% in September and 3.6% on the year. The BBC said hourly earnings rose 3% over the year while consumer prices rose 3.7%.
Investment can lift GDP while pay trails prices and households save less. These are national averages, not one family’s receipt, and no employer announced a wage cut here.
Did 3.4% growth mean household costs eased? No. The reports show strong growth, a 3.8% September saving rate, and prices rising faster than the reported 3% gain in hourly earnings.