Gross domestic product jumped a higher-than-expected 3.2 percent in the third quarter of 2022, according to the latest estimate from the Bureau of Economic Analysis. The last estimate, released in November, showed a smaller 2.9 percent increase.
The upswing was fueled by a number of factors, including increased consumer spending, rising exports, falling imports, and more government spending.
Consumer spending in particular juiced the numbers. Even as spending on durable goods continued to decline, services picked up the slack, and especially healthcare saw significant gains. Increased business investment also gave GDP a boost.
Backing this up is a continued rise in disposable personal income, which increased $242.4 billion, or 5.4 percent, in the third quarter. Even with inflation, real disposable personal income increased 1.0 percent.
On the downside, fixed residential investment fell, with brokers' commission on new single-family construction leading the decline. This tracks with recent data from the National Realtors Association showing home sales declining 7.7 percent in November. The industry is experiencing a downturn as the Federal Reserve hikes rates.
"The Fed's efforts to slow the economy are clearly visible in Q3 GDP as residential investment was down 27.1%, compared with the 26.8% in the prior estimate," wrote Oren Klachkin, the lead U.S. economist for Oxford Economics, in a research brief.
Private inventories also took a hit, with retailers and general merchandise stores burning through backlogs of items with heavy discounts. Nike's latest earnings, for example, showed the sneaker giant selling off its excess inventory after months of glutted shelves.