US GDP Growth Confirmed at 3.5% in Q3


The US economy advanced an annualized 3.5 percent on quarter in the third quarter of 2018, in line with earlier figures, the second estimate showed. It follows a 4.2 percent growth in the previous period which was the highest since the third quarter of 2014. Upward revisions to nonresidential fixed investment and private inventory investment were offset by a downward revision to consumer spending and a higher drag from net trade.

Personal consumption expenditure (PCE) contributed 2.45 percentage points to growth (2.69 percentage points in the advance estimate) and rose 3.6 percent (4 percent in the advance estimate). Spending rose less than expected for services (3.1 percent compared to 3.2 percent) and durable goods (3.9 percent compared to 6.9 percent) but increased more than in the advance estimate for nondurable goods (5.3 percent compared to 5.2 percent). 

Fixed investment made a positive contribution (0.25 percentage points compared to -0.04 percentage points in the advance estimate) and rose 1.4 percent (compared to a 0.3 percent fall in the advance estimate). Investment declined less than anticipated for structures (-1.7 percent compared to -7.9 percent) and residential investment (-2.6 percent compared to -4 percent). Also, investment rose faster for equipment (3.5 percent compared to 0.4 percent) but less for intellectual property products (4.3 percent compared to 7.9 percent).

The contribution from private inventories turned more positive than previously expected (2.27 percentage points compared to 2.07 percentage points in the advance estimate).

Exports fell 4.4 percent (-3.5 percent in the advance estimate), mainly due to a decline in soybean exports to China after Beijing's tariffs took effect. Imports rose 9.2 percent (9.1 percent in the advance estimate), before US import tariffs take complete effect. As a result, the impact from trade was -1.91 percent, compared to -1.78 percent in the advance estimate, the biggest drag on growth since the second quarter of 1985.

Government spending and investment added 0.44 percentage points to growth, below 0.56 percentage points in the previous release. It increased 2.6 percent, lower than 3.3 percent in the advance estimate.

US GDP Growth Confirmed at 3.5% in Q3


BEA | Joana Taborda | joana.taborda@tradingeconomics.com
11/28/2018 2:07:49 PM