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Home / Business / GDP in the third quarter: The economy grew at an annual rate of 3.5 percent

GDP in the third quarter: The economy grew at an annual rate of 3.5 percent

The US economy grew at an annual rate of 3.5 percent in the third quarter. The Republicans claim that President Trump is embarking on a boom, with only eleven days left before the congressional elections.

Growth slowed compared to the second quarter This equates to a rate of 4.2 percent, but the economy continues to have the best four-year back-to-back quarters thanks to free spending by consumers and the federal government scores and is within the Trump administration's goal of 3 percent a year.

Despite all the trade about the market [stock]the economy looks pretty good, "said Ethan Harris, chief economist of Bank of America Merrill Lynch. "History is a double dose of caffeine from tax cuts and spending increases."

Vice President Pence announced growth of 3.5 percent on Friday and wrote on Twitter that under Trump, "the US economy is making a REAL COMEBACK." almost a decade of slow growth.

The strong headline growth capped an unsteady week on Wall Street, where the Dow Jones industrial average gave up all of its profits for the year. The US Department of Commerce's report on Friday gave a mixed verdict on the President's outlook for a lasting era of improved economic performance, suggesting that rising interest rates are starting to bite.

"The details for the growth were not as impressive as those of the 3.5 headline," said Jim O & Sullivan, US chief economist for high-frequency economics, in an e-mail.

The government announced the tax reliefs from the last year, to boost business spending on new machinery, computers, and factories, but the apparent gains earlier this year seem to be easing, as the report shows.

Corporate investment rose 0.8 percent in the quarter, after one 8.7 percent increase over the previous three months, with spending on new structures down 7.9 percent after having risen 1

4.5 percent over the previous period

"This probably tells us that growth is in the pipeline Fourth quarter will be slightly slower, "said Ben Ayers, chief economist of Nationwide Insurance. [19659010] Another big drawback: trade has the strength of the economy in $ 20.7 trillion weakened as imports outperformed exports with a rising margin. The President has made shrinking the trade deficit an important goal, but has not made progress after 21 months in office.

Since January, Trump has imposed tariffs on overseas solar panels, washers and industrial metals, and about half of them have imposed $ 505 billion on products that the United States imports from China every year.

His threats to raise additional tariffs on Chinese products may have prompted US companies to increase their imports to beat rising prices.

Third-quarter results were below the expectations of the President, who had promised in July that the value for the third quarter would be "many times higher" than the second quarter at 4.2 percent.

Shortly after taking office in 2017, the president pledged a "return" of up to 4 percent annual economic growth, a value the United States has not achieved since 2000. But government officials like Treasury Secretary Steven Mnuchin have recently stated three percent for years of annual growth as their goal.

Although the economic report is good news for the president, it is likely to give the Republicans only a limited political boost, according to Matt McDonald, partner at Hamilton Place Strategies, who worked as White House communications adviser to President George W. Bush ,

"Where the government has had difficulties, it is to tie the low unemployment rate and the strong economy to all the measures that they have taken, such as the tax cut," he said by a large margin of 61 percent to 30 percent said Voters over the past month, Trump's tax cuts favored "big corporations and the rich" versus "middle-class families," in a Republican poll conducted by Bloomberg News.

The persistent financial market volatility can also shake voters well-being. The Dow fell more than 296 points on Friday and continued its downtrend, which has gained more than 2,100 points against the benchmark since October 3.

Investors lost more than 6 percent against the Dow over the past month and more than 10 percent at the tech-rich Nasdaq index.

Market outlook is clouded by the Federal Reserve's plans to raise interest rates further. The National Bank has raised short-term interest rates three times to between 2 and 2.25 percent this year and is expected to do so again next month.

This increases the cost of borrowing, which depresses the housing industry. Residential investment fell 4 percent, negative for the third consecutive quarter.

With mortgage rates of over 5 percent, sales of new single-family homes dropped 5.5 percent month-on-month to a seasonally adjusted 553,000, the fourth consecutive month-on-month decline, a government report said Thursday.

Sales in September were more than 13 percent lower than in the same month of the previous year, and the figures for the previous three months have also been revised lower.

The Commerce GDP report – a preliminary estimate that will be revised twice in the coming weeks – has it that Trump once again criticized Fed Chairman Jerome H. Powell for raising interest rates this week and the country's central bank as the "biggest risk" for further growth.

The lowest unemployment rate since 1969, the Fed raised interest rates to prevent annual inflation from rising. Prices are rising at an annual rate of 2 percent, according to the Fed's preferred scale.

Nevertheless, Friday's news was better than most analysts expected. Strong consumer and government spending supported growth from July to September. Inventory building also helped, indicating a potential weakness as companies reduce production while reducing backlogs.

"The economy is still growing significantly above its potential, which is quite remarkable," said economist Michael Strain of the American Enterprise Institute, citing an expansion that has not gone through a recession since 2009.

Friday's report showed little sign of a lasting improvement in the economic development of the economy. The fastest way to achieve a higher standard of living is for the nation's workers, farmers and factories to produce more with the same resources. For years, however, the United States has had difficulty achieving higher productivity.

"According to today's figures, we estimate that the productivity of non-agricultural enterprises in the last quarter has increased at an annual rate of 1.6% and only 1.1% over the previous year," said economist Michael Feroli JPMorgan Chase wrote in a note to customers. "This number is right in the middle of the murky rut she's been in for the last ten years."

The latest business card created by Ministry of Commerce officials limits a week of mixed economic news. On Thursday, the Census Bureau announced that long-term durable goods orders rose 0.8 percent better than expected in September. According to a separate report from the Labor Department, the labor market remained strong and new unemployment insurance claims remained near half a century.

As the congressional elections on 6 November threaten, Republicans will celebrate the robust growth of the economy – without ignoring it. Economists predict that growth will slow down next year – and Democrats will complain that the profits are not distributed equally.

"Best of all," said House Ways and Means Committee chair Kevin Brady (R-Tex.). "I think there will be more growth in the long term."

The left-leaning Center for American Progress said that "workers of the working class and middle class" had not yet seen any profits from the Trump tax cut. Lower corporate tax revenues are causing deficits to increase and fuel Republican demands for Medicare and Social Security cuts, the group said in an analysis of GDP outcomes.

Only one more important economic snapshot is released – the monthly figures for employment growth and unemployment on 2 November.

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