What caused the US Q3 GDP growth to spike to 4.9%? Is the best over for the US?

US Q3 GDP: 4.9%

Let's do a simple GDP breakdown to analyze the US GDP growth.

GDP growth = Government spending (G) + Investment (I) + Consumption (C) + Net Export (X-M).

Q2GDP Growth (2.1) = 0.57 (G)+0.9 (I)+0.55 (C)+0.04 (Net Export) = 2.06 (2.1)

Q3GDP Growth (4.9) = 0.79 (G)+1.47 (I)+2.69 (C)+-0.08(Net Export) = 4.87(4.9)

As we compare between Q2 and Q3 GDP growth (0.55 vs 2.69 respectively), we can see a significant increase in US consumptions that boost the US economy in Q3.  However, this sudden spike in the GDP growth is unsustainable because it is funded by debts.  The US personal savings rate had been declining recently and the US consumption was supported by debts.

The increases in debts had also caused the credit card delinquency rate to rise over the years.  This means that there are more Americans unable to repay their debts now.  Thus, these Americans will have to reduce their spendings now and this will impact the Q4 GDP growth.

Don't be surprised to see a dismal Q4 GDP growth!