MAGA: The US economy grew at a 3.5% pace in the third quarter, faster than expected

Fred Imbert | @foimbert
Published 2 Hours Ago Updated 1 Hour Ago
CNBC.com

NOT BAD FOR A MAN WHOM THE MEDIA AND HIS LIBERAL OPPONENTS ALL SAID WOULD DESTROY THE ECONOMY
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1.Gross domestic product expanded by a 3.5 percent annual rate. Economists polled by Dow Jones expected the economy to expand by a 3.4 percent annual rate.

2.The department said the PCE price index, a key measure of inflation, increased by 1.6 percent last quarter, much less than the 2.2 percent increase expected by economists polled by StreetAccount.

3.Consumer spending, which accounts for more than two thirds of U.S. economic activity, grew by 4 percent in the third quarter, the strongest since the fourth quarter of 2014.

The U.S. economy grew at a faster-than-expected rate in the third quarter as inflation was kept in check and consumer spending surged, according to data released by the Commerce Department on Friday.

Gross domestic product expanded by a 3.5 percent annual rate. Economists polled by Dow Jones expected the economy to expand by a 3.4 percent annual rate.

The department said the PCE price index, a key measure of inflation, increased by 1.6 percent last quarter, much less than the 2.2 percent increase expected by economists polled by StreetAccount.

Consumer spending, which accounts for more than two thirds of U.S. economic activity, grew by 4 percent in the third quarter, the strongest since the fourth quarter of 2014. The strong rise in consumer spending helped offset a 7.9 percent decline in business spending. That was the biggest quarterly decline in business spending since the first quarter of 2016.

"The headline was not too far from expectations, but we did get a few surprises. Consumer was stronger than we expected," said Scott Brown, chief economist at Raymond James. "The consumer accounts for 68 percent of overall GDP, and the consumer really drives the bus. Business to be sure, but there's got to be consumption ant the end of it."

While stronger than expected, the overall expansion was a slower pace of growth than in the previous quarter. Gross domestic product grew by 4.2 percent in the second quarter, marking the fastest quarterly expansion since the third quarter of 2014. The economy increased by 2.2 percent annual pace in the first quarter of the year.

Read More here: https://www.cnbc.com/amp/2018/10/26/first-read-on-us-q3-2018-gross-domestic-product.html

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