Despite everything that\u2019s going on in this economy right now \u2014 tariffs, inflation, and a sluggish job market \u2014 gross domestic product is likely to grow even more than expected.<\/p>\n
That\u2019s according to economists surveyed by the National Association for Business Economics. Back in June, they expected the economy to grow by 1.3% this year. Now they expect it to add 1.8%. And according to the Atlanta Fed\u2019s GDPNow tracker,<\/a> growth in the third quarter could be as high as 3.8%.<\/p>\n Here\u2019s how gross domestic product is calculated: It\u2019s consumption, plus government spending, plus investment, plus exports, minus imports.<\/p>\n That last piece pulled GDP down early in the year, because businesses imported a ton of stuff to get ahead of tariffs.\u00a0But after that, things changed.<\/p>\n \u201cWe saw a reversal. We saw a significant drop in imports in the middle of the year,\u201d said JoAnne Feeney at Advisors Capital Management.<\/p>\n That led GDP to rebound. But it wasn\u2019t just imports.\u00a0The next piece of the equation is capital investment, and that\u2019s been huge thanks to the buildout of AI data centers.<\/a><\/p>\n \u201cThese are expensive facilities full of domestically designed and produced equipment, and that is absolutely having a significant impact on the investment numbers,\u201d Feeney said.<\/p>\n It\u2019s also having a big positive impact on the stock market. And that\u2019s propping up consumer spending, especially among people who own stocks.\u00a0<\/p>\n \u201cPeople at the very top have, through a sort of wealth effect, been powering consumption,\u201d said Stephanie Kelton, a professor of economics at Stony Brook University.<\/p>\n