US growth still strong at 3.5% for third quarter

The United States' gross domestic product in the July-September period grew at an unrevised 3.5 per cent annualised rate
The United States' gross domestic product in the July-September period grew at an unrevised 3.5 per cent annualised ratePHOTO: AFP

The United States economy remained on a solid footing in the third quarter, matching previously reported results, as stronger business investment and a bigger boost from inventories cushioned the worst trade drag since 1984.

Gross domestic product in the July-September period grew at an unrevised 3.5 per cent annualised rate, Commerce Department data showed yesterday.

Household spending, which accounts for about 70 per cent of the economy, grew 3.6 per cent, revised from 4 per cent, on weaker durable goods purchases.

The biggest change from the prior report on gross domestic product (GDP), the value of all goods and services produced in the nation, came from stronger business investment.

Non-residential fixed investment - which includes spending on equipment, structures and intellectual property -  grew 2.5 per cent, revised from a 0.8 per cent gain. Economists are monitoring such spending because, along with consumer purchases, it was a main driver of growth in the first half.

Combined with a 4.2 per cent pace of GDP growth in the April to June period, the results capped the best back-to-back quarters since 2014. At the same time, growth is projected to moderate this quarter.

Housing still posted a third consecutive drag on GDP growth and reaffirmed that the industry has entered a slowdown. Inflation rose an unrevised 1.7 per cent.

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A version of this article appeared in the print edition of The Straits Times on November 29, 2018, with the headline 'US growth still strong at 3.5% for third quarter'. Print Edition | Subscribe