- Reuters/Rebecca Cook
- Economic activity cooled further in the third quarter amid ongoing trade disputes.
- Still, the 1.9% growth exceeded consensus analyst forecasts for 1.6%.
- The results cast further doubt on the prospect that Trump would fulfill his longstanding pledge to bring US growth to or above 3% this year.
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The record-long US expansion cooled less than expected in the third quarter as strong consumer spending partially offset the effects of ongoing disputes between the Trump administration and major trading partners.
The Commerce Department estimated Wednesday that gross domestic product, a broad measure of all the goods and services produced in a country, rose by 1.9% from July to September. Economists had expected 1.6% growth. In the previous quarter, GDP came in at 2%.
Consumer spending was the report’s bright spot, increasing at a 2.9% that beat forecasts calling for a 2.6% expansion.
Still, the results cast doubt on the prospect that the Trump administration would fulfill its longstanding pledge to bring growth to or above 3% this year. Annual GDP has consistently registered significantly below that target throughout the president’s term, undermining a key talking point as he campaigns for re-election.
Even after a key recession warning flashed in August for the first time since the global financial crisis, the White House has continued to take a far rosier stance on the economy than independent forecasters and the Federal Reserve.
“The Greatest Economy in American History!” Trump wrote on Twitter less than an hour before the GDP report was released.
The US central bank, which Trump regularly attempts to blame for any economic shortcomings, is set to announce its latest decision on borrowing costs at the end of a two-day policy meeting later Wednesday.
Policymakers on the Federal Open Market Committee have signaled they could lower interest rates for the third time since the financial crisis, a move that would bring the benchmark range to between 1.5% and 1.75%. The monthly jobs report on Friday, which is expected to show hiring cooled further in October, could shed more light on the outlook for the rest of the year.
Wednesday’s GDP reading is preliminary; a second estimate for the third quarter is scheduled to be released November 27.