U.S. economy slightly slowed in the third quarter but still beat economist expectations thanks to strong consumer spending, FT reported.
US’s GDP grew at a tepid 1.9 percent this quarter though it surpassed projections of 1.6 percent but still down from the previous quarter’s growth rate of 2 percent, according to data released on Wednesday (Oct 30) by the Commerce Department.
Later in the day, the Federal Reserve cut its benchmark interest rate by a quarter of a percentage point, the third time it has done so this year. Fed signalled that it has finished easing monetary policy for the time being, pending clearer economic data. The new lending rate ranges from 1.5 to 1.75 percent.
Business investment continued to decline while imports, which reduces GDP, increased. Personal consumption expenditures, a measure of what households buy, came in at 2.9 per cent though dwon from 4.6 per cent in the second quarter. The retail sales decreased 0.3 percent last month, the first drop since February.
The government spending increased by 2 percent, contributing positively to the GDP figures.
The numbers were announced amid concerns that the economy is slowing down as trade battles with China and other countries continue to hurt American companies and consumers.
Trump administration has slapped 10 and 25 percent tariffs on hundreds of billions of dollars in Chinese imports as the two countries continue trade deal negotiations. In retaliation, China has imposed 25 percent tariffs on tens of billions in U.S. goods
US businesses continue to be conservative in their investment outlook. Nonresidential fixed investment, a measure of what businesses spend on buildings and gear, declined by an annualised 3 per cent. This represents a multi-year low.
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