Rather than slowing down, which is what one would expect considering the cumulative tightening of monetary policy, US growth has been stellar in the third quarter. Household consumption has been a key contributor to this performance but public spending, inventory rebuilding and a rebound in residential construction have also underpinned growth. It is to be expected that growth will slow down going forward. High mortgage rates will weigh on construction activity, there is a risk that companies will prefer to reduce their inventories if they expect softer demand and there are limits to how far households will want to reduce their savings rate and run down their excess savings accumulated during the pandemic.
