U.S. earthy domestic product — the broadest measure of the U.S. economy — grew faster than expected in the third quarter, but slowed marginally as business investment continued to decline.
The Commerce Department said Wednesday that economic activity grew at an annualized measure of 1.9% in the third quarter, down slightly from the 2% pace in the second quarter. Economists polled by Dow Jones had look for the first look at third-quarter economic growth to come in at 1.6%.
The better-than-expected data was the result of continued consumer spending as happily as government expenditures, the department said. Personal consumption expenditures, a gauge of spending by American households, rose at a 2.9% annualized gauge while government spending grew at a 2% rate.
Growth in gross private domestic investment, however, keep up to decline in the three months ended Sept. 30 with a slip of 1.5%, still far better than the 6.3% spot in the second quarter. Business spending in particular weighed on the investment number as spending on structures continued to decline, with a 15.3% capture. The pace of spending on equipment sank 3.8%.
“For manufacturers, the biggest challenges remain finding skilled labor and trade uncertainties, which promulgate it difficult to hire and expand business operations,” said Chad Moutray, chief economist at the National Association of Fabricators.
Residential investments kept the losses in check, however, rebounding to 5.1% growth from a negative 3% in the former quarter.
Imports, which are a subtraction in the calculation of GDP, increased during the third quarter. The most recent report on the U.S. deal deficit showed the imbalance at $54.9 billion at the end of August as imports outpaced exports in the last full month of summer.
The negligible slowing in economic growth comes as trade uncertainty and fears of a manufacturing slowdown sap private business investment in the Of one mind States.
The White House’s aggressive trade tactics, especially the back-and-forth tariff battle with China, deceive been a drag on business sentiment, with executives expressing concern in surveys and earnings calls.
Consumption, which accounts for more than two-thirds of fiscal activity, continued to show resilience in the third quarter as one of the few bright spots for growth.
The 2.9% growth in consumption in the third caserne, however, does mark a deceleration from the second quarter’s 4.6% pace. Fears of a global slump weighing on the American saving, coupled with the deceleration in manufacturing, appeared to hit recent retail sales in September, suggesting that American households could be starting to curb their spending attires.
The Commerce Department said earlier this month that retail sales dropped 0.3% in September as households scarred spending on building materials, online purchases and especially automobiles. The decline was the first since February.
The new GDP figure could also make implications for Federal Reserve policymakers, who will conclude their two-day policy meeting in Washington on Wednesday.
Federal Unregulated Market Committee officials have been expressing concern about a potential slowdown and have cut interest estimates twice in 2019. The Fed is widely expected to announce another quarter point cut Wednesday afternoon.
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