US GDP Growth Slowed to 3.5% in Q3

Forex News

Growth of the US economy slowed in the third quarter as previously reported. The Commerce Department said in its second estimate of third-quarter GDP growth, that the gross domestic product (GDP) increased at a 3.5% annualized rate, unchanged from its estimate in October. Meanwhile, the US economy grew at a 4.2% pace in the second quarter.

The report also showed, that after-tax corporate profits increased at a 3.3% rate in Q3 after rising at a 2.1% pace in the second quarter. An alternative measure of economic growth, gross domestic income (GDI), increased at a rate of 4.0% in the third quarter, quickening from the second quarter's 0.9% pace.

Growth in consumer spending, which accounts for more than two-thirds of US economic activity, increased by 3.6% in the third quarter, down from the 4.0% rate estimated in October. Inventory investment added 2.27% to GDP growth, more than the 2.07% reported last month, and was the biggest contribution since the fourth quarter of 2011.

Growth is being driven by Donald Trump’s $1.5 trillion tax cut package, which has given consumer spending a jolt and bolstered business investment. The fiscal stimulus is part of measures adopted by President Donald Trump's administration to boost annual growth to 3% on a sustainable basis.

Economists forecast, that the US economy would grow by 2.5% in the fourth quarter.