The U.S. economy grew at a robust 4.3% annual rate in the third quarter, with consumer spending driving the expansion despite ongoing inflation. Economists were surprised by the strong growth, with consumer spending rising to a 3.5% annual pace. However, a recent survey showed that consumer confidence is declining, indicating potential economic challenges ahead. Inflation remains higher than desired by the Federal Reserve, which could impact interest rate decisions. Investment in artificial intelligence continues to grow, while government spending saw an increase in the third quarter. The GDP data also showed a rise in exports and a decline in imports.

Despite the strong economic growth, concerns remain about the labor market, which has shown signs of weakening. Job creation has slowed significantly, with businesses hesitant to hire due to uncertainty over tariffs and interest rates. The unemployment rate rose to 4.6% in November, the highest since 2021. Fed Chair Jerome Powell has expressed concerns about the labor market’s trajectory, indicating that job creation numbers may be revised lower.

Read more at Finance Yahoo: Resilient US consumers drive strongest economic expansion in 2 years