Overview: The economy rebounds with 1.1% growth
The latest data shows the economy expanding by 1.1% in the September quarter, aided by stronger activity across business services, manufacturing and construction. The pace marks a solid rebound after a revised contraction in the prior quarter and outpaces economists’ expectations for a rise between 0.8% and 1.0%.
Quarterly and annual perspective
On a year-over-year basis, the economy is up by about 1.3%, indicating a modest but meaningful improvement from the year-ago period. The sequential quarter-on-quarter figure places the September period above a previously feared stagnation, while still leaving room for policymakers to assess sustainability amid global uncertainties.
What powered the rebound?
Growth in the September quarter was led by multiple sectors expanding in tandem. Growth in business services contributed as firms invested in digitization, outsourcing and advisory services. Manufacturing benefited from resilient demand and domestic production, helping to lift output. Construction also posted gains, driven by renewed project activity and infrastructure-related work. Telecommunications and media showed positive momentum as demand for connectivity and content persisted, helping broaden the growth base.
Revisions to the prior quarter
The previous quarter was revised lower, recategorized as a 1% contraction rather than a 0.9% decline. The revision emphasizes the challenge of pinpointing quarterly dynamics in a volatile environment, but the latest data highlights a meaningful shift toward expansion for the current period.
Implications for policy and markets
The 1.1% September-quarter growth provides a cushion for policymakers as they weigh the pace of stimulus withdrawal and the trajectory of inflation. A stronger growth print can support expectations that the economy is moving toward healthier demand conditions, while ongoing pockets of weakness—such as in consumer spending or export demand—may temper confidence. Financial markets will parse this release for clues on timing and scope of policy normalization, including any shifts in interest-rate guidance or asset purchase programs.
Outlook and risks
Analysts suggest the economy could sustain growth if services demand remains robust, manufacturing stays resilient and investment continues to recover. However, risks persist from global supply-chain disruptions, energy price swings and geopolitical tensions that could dampen momentum. A cautious but constructive outlook remains common among economists, with vigilance on inflation, wage dynamics and consumer confidence.
Bottom line
The September quarter’s 1.1% growth marks a positive turn for the economy, supported by gains in business services, manufacturing and construction. While revisions to past data underscore the unpredictable nature of quarterly measurements, the current expansion provides a platform for gradual improvement in activity and sentiment into the next quarter.
