The US economy bounced back last quarter after shrinking in the first half of the year

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CNN Business

The US economy grew last quarter, bouncing back after shrinking in the first half of the year.

Gross domestic product — the broadest measure of economic activity –rose by an annualized rate of 2.6% during the third quarter, according to initial estimates released Thursday by the Bureau of Economic Analysis. That’s a turnaround from a decline of 1.6% in the first quarter of the year and negative 0.6% in the second.

Economists had projected third-quarter growth of 2.4%, according to consensus estimates on Refinitiv.

The welcome burst in economic growth was mostly fueled by a rebalancing of imports and exports, with fewer foreign goods shipped to the United States as consumers shifted their attention away from pandemic-fueled spending on sofas, bikes and other durable goods and turned to travel and dining out.

“This is the sort of GDP report we should be happy to see at this point in a recovery,” said Dean Baker at the Center for Economic and Policy Research in a note. “However, with the Federal Reserve continuing to hike rates, and most of the impact of past rate hikes yet to be felt, this could be the last good report we see for a while.”

This story is developing and will be updated.