WASHINGTON (Reuters) – The US economy slowed down in the third quarter, as previously reported, but the speed was strong enough to continue to grow to hit the 3 percent target of the Trump administration this year. fourth quarter.
FILE PHOTO: Teams load and unload consumer goods in the port of New Orleans on March 23, 2010 in the port of New Orleans at the port of New Orleans. REUTERS / Sean Gardner
The Ministry of Commerce said that the third-quarter GDP growth rate on Wednesday increased by 3.5 per cent year-on-year in gross domestic product. This has not changed much from its October forecast and the growth potential of the economy. Economists are about 2 percent.
The unpredictable third-quarter GDP was offset by downward revisions to consumer spending and exports, resulting in a faster stock build-up and more business spending equipment. The economy grew by 4.2 percent in the April-June quarter.
Strong growth in the last quarter led the Central Bank to continue to raise interest rates for the fourth time this year. This shows that hard criticism from President Donald Trump has slowed the economy.
Fed President Jerome Powell said on Wednesday at an Economic Club's lunch in New York, the US central bank expects robust growth, low unemployment and inflation near its 2 percent target.
Aç There's a lot to like from this perspective, Pow Powell said.
US Treasury prices have risen slightly, with the dollar slightly changing against a basket of money. Stocks in Wall Street were trading higher.
The growth is driven by the $ 1.5 trillion tax cut package, which enables the Trump administration to spend a shaky and supported business investment to the consumer. Financial incentives are part of the measures adopted by the White House to increase annual growth to 3 percent in a sustainable manner.
Gross domestic product (GDI), an alternative measure of economic growth, increased by 4.0 percent in the third quarter and rose by 0.9 percent in the second quarter.
The GDP and GDI average, which are considered to be a better measure of economic activity, increased by 3.8 percent in the second quarter from 2.5 percent growth rate in the second quarter.
The income side of the growth book rose with the corporate income after tax. This increase increased by 3.3 percent in the last quarter, an increase of 2.1 percent in April-June period.
However, dark clouds are gathered on the ninth and on the economic expansion of the second longest record. The Trade Department has been expanding for a while in October, reducing the export of soybeans, capital goods and automobiles.
WEAK HOUSING MARKET
In a third report, new home sales indicated in October that the housing market is the most recent indicator that it has started to soften due to higher interest rates.
The data released last week showed that the weakening of equipment in October showed business spending and Brent crude oil prices fell 30 percent more than the four-year high at $ 86 on early October. The cheaper oil tends to invest in the energy sector due to declining profits.
General Motors Co.GM.NIn a statement Monday, thousands of people in North America would be cut off, production would be interrupted, and slowing car models would erode, which could lead to fluctuations in the country's economy.
Growth forecasts for the fourth quarter are now around 2.5 percent. Economists expect GDP growth to be even slower in 2019 due to the disappearance of financial incentives and a tough trade war with China, as well as a strong dollar.
"Growth will slow down in the near term," said Gus Faucher, chief economist at PNC Financial Services in Pittsburgh. ”A trade war is the biggest negative risk.“
The slowdown in the third-quarter growth mostly reflected the impact of corn tariffs in Beijing on US exports, including soybeans. Prior to the start of the tariffs, farmers' preloaded shipments to China came into force in early July, accelerating second-quarter growth. Since then, soybean exports have declined each month and the trade deficit has increased.
Imports increased sharply in the third quarter, although the decline in exports was sharper than previously estimated. The resulting larger trade deficit fell by 1.91 points from GDP growth in the third quarter instead of 1.78 points reported last month. This was the best since the second quarter of 1985.
Imports stemmed from strong domestic demand, and businesses are stocked ahead of US import duties, the largest in China in the third quarter.
Imports are excluded from GDP growth. However, some of the imports ended in warehouses and contributed to the GDP in addition to the stock stock.
Stocks were $ 86.6 billion, replacing the estimated $ 76.3 billion rate in October. Inventory investment added 2.27 percentage points to GDP growth. This was more than 2.07 points reported last month and was the biggest contribution since the fourth quarter of 2011.
Growth in consumer spending, which accounted for more than two-thirds of US economic activity, increased by 3.6 percent in the third quarter from 4.0 percent in October.
Business spending in equipment increased by 3.5 percent instead of the previously reported 0.4 percent. This was still the slowest pace in two years. Moderation in business spending was charged with import tariffs that increased production costs for companies.
Lucia Mutikani & # 39; s reporting; Editing by Andrea Ricci