- REUTERS/Brian Snyder
- The record-long expansion cooled in the third quarter but kept up a solid pace.
- The Commerce Department said Wednesday that gross domestic product rose by 2.1% from July to September.
- Strong consumer activity has offset the effects of a more than yearlong trade dispute between the two largest economies.
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The record-long expansion cooled less than previously estimated in the third quarter and kept up a solid pace, as strong consumer activity offset the effects of a more than yearlong trade dispute between the two largest economies.
The Commerce Department said Wednesday that gross domestic product, a broad measure of all the goods and services produced in a country, rose by 2.1% from July to September. That was compared with an advance reading of 1.9%, which was released last month. GDP expanded 2% in the second quarter and 3.1% at the beginning of the year.
Consumer spending, which accounts for more than two-thirds of economic activity, held up at a robust pace. Households have fueled an economy that was otherwise expected to slow, particularly after the US and China placed steep tariffs on thousands of each other’s products.
The two sides have attempted to hammer out an interim agreement to defuse trade tensions, but an uncertain outlook has forced companies to pull back on investment. Businesses spent far less on capital this summer, with nonresidential fixed investment falling 2.7%.
“Slowing investment is mainly due to heightened uncertainty over the future direction of US trade policy, as well as slowing external demand amid a cooling of the global economy,” said Agathe Demarais, global forecasting director at The Economist Intelligence Unit. “Against this backdrop, consumer demand represents the only remaining engine of US growth.”
A third GDP estimate is scheduled to be released on December 20.
This story is developing. Please check back for updates.