- REUTERS/Jim Young
- The Commerce Department bumped down third-quarter gross domestic product in a third estimate released Thursday.
- GDP increased by 3.2%, down from the prior 3.3% estimate, as the growth of consumer spending was found to be weaker than initially reported.
- Republicans are counting on tax cuts to propel the economy even further.
The Commerce Department on Thursday lowered its estimate for US economic growth in the third quarter as consumer spending was a little weaker than previously reported.
Gross domestic product, the total value of every good and service produced in the US, was found to have grown by 3.2%, down from 3.3% in the third estimate. Personal consumption, which makes the biggest contribution to the economy’s growth, was revised down to a 2.2% increase from 2.3%.
GDP remained above the 3% pace that President Donald Trump had promised for the US economy while he was campaigning. A strong fourth quarter with growth near this level will be needed to achieve 3% GDP on an annual basis, something the US economy hasn’t achieved since 2005.
Congress passed the final version of Republicans’ tax bill on Wednesday, ending a seven-week push to put the monumental piece of legislation on Trump’s desk by Christmas. Republicans expect the extra disposable income that consumers get, and wage increases from corporate tax cuts, to boost economic growth.
But with the impact still largely unknown, some economists are forecasting only a small increase to growth in the years ahead. The Federal Reserve said last week that tax cuts were a factor supporting its modestly stronger outlook, but it warned that there was still uncertainty.