Fundamental analytics

US GDP in the third quarter was weaker than expected

In the third quarter, US production grew by 3.2% year-on-year, the government's official statement said, lower than the previous estimate, but figure points to an economic impulse ahead of large tax cuts.

The Department of Trade published new data as part of a routine review of data on quarterly economic growth. Earlier, the agency reported that the gross domestic product produced throughout the economy, from July to September increased by 3.3%.

Figures showed that consumer spending during the quarter was slightly weaker than previously thought, which led to a downward revision of the growth. Economists surveyed by The Wall Street Journal expected that the latest estimate would remain at 3.3%.

Despite a lower estimate, the third quarter was the best in the US economy since 2015. Consumer spending continues to keep pace, as does business investment, and exports continued to grow, reflecting the strengthening of the global economy.

For a decade, the American economy appears to be in one of the strongest growth rates. Some economists believe that in the current quarter, output is growing at a similar pace. The analitical firm Macroeconomic Advisers forecasts GDP growth in the fourth quarter at 2.9%, while the forecast for the latest data from the Federal Reserve System of Atlanta was 3.3%.

The Thursday report contains several changes. Consumer spending - the largest source of economic demand in the US - increased by 2.2% in the third quarter, instead of previously reported 2.3%. This largely reflected the reduction in the cost of services.

The report also showed that corporate profits were slightly weaker than previously thought. The observed after-tax profit, excluding reserve estimates and capital adjustments, increased by 4.7%, and not by 4.9%.