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U.S. derde kwartaal groei unrevised; headwinds increase

WASHINGTON (Reuters) – The U.S. ekonomie drog i tredje kvartal som tidligere rapportert, men det var sandsynligvis stærkt nok til…

WASHINGTON (Reuters) – The U.S. ekonomie drog i tredje kvartal som tidligere rapportert, men det var sandsynligvis stærkt nok til at holde væksten på banen til at nå Trump administrationens 3 procent mål i år, selv om momentum fremstår som modereret yderligere tidligt i fjerde kvartal.

FILE PHOTO: Crews load and unload consumer products at the Port of New Orleans along the Mississippi River in New Orleans, Louisiana June 23, 201

0. REUTERS / Sean Gardner

Gross domestic product increased at a 3.5 percent annualized rate, The Commerce Department said on Wednesday in its second estimate of third quarter GDP growth. Det var uændret fra dets estimat i oktober og godt over økonomiens vækstpotential, som økonomerne vurderer at være omkring 2 procent.

The economy grew at a 4.2 percent pace in the second quarter. Mens virksomheder ophørte med at opretholde et hurtigere tempo og brugte mere på udstyr end oprindeligt tænkt i tredje kvartal, var det kontrasvaret af nedadgående revisioner til forbrugernes eksport og eksport.

Growth is being driven by the White House’s $ 1.5 billion tax cut package, which has given consumer spending a jolt and supported business investment. The fiscal stimulus is a part of measures adopted by President Donald Trump’s administration to boost annual growth to 3 percent on a sustainable basis.

The government also reported on Wednesday that after-tax corporate profits increased at a 3.3 percent rate last quarter after rising at a 2.1 percent pace in the second quarter.

An alternative measure of economic growth, gross domestic income (GDI), increased at a rate of 4.0 percent in the third quarter, and 0.9 percent pace from the second quarter.

The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at a 3.8 percent rate in the July-September period, up from a 2.5 percent growth rate in the second quarter .

But dark clouds are gathering over the economic expansion that is now in its ninth year and the second longest on record. The goods trade deficit widened further in October, pressured by declining exports of soybeans, capital goods and automobiles, the Commerce Department said in another report on Wednesday.

New home sales tumbled in October, the latest indication that the housing market was softening due to higher interest rates.

Data released last week showed business spending on equipment weakening in October and it could remain too low with Brent crude oil prices slumping by more than 30 percent from a four-year high above $ 86 in early October. Billigere olie tends te slecht investeren in de energiesector als gevolg van verminderde winsten.

General Motors Co. ( GM.N ) said on Monday that it would cut thousands from its North American workforce, slash production and eliminate some slow-selling car models, which could have ripple effects on the domestic economy.

Solid third quarter growth is expected to keep the Federal Reserve on course to raise interest rates in December for the fourth time this year, despite an escalation of criticism from Trump, that tightening monetary policy is slowing down the economy.

The second estimate for the July-September quarter GDP growth was in line with economists’ expectations. U.S. Financial markets were little moved by the data.

CONSUMER SPENDING REVISED LOWER

Growth estimates for the fourth quarter are currently around a 2.5 percent pace. Economists verwachten dat de groei van de BNP te langzamer zal toenemen in 2019 als de fiscale stimulansen fades en de effecten van een bittere handelsoorlog met China en een sterke dollar hun tolleniveau hebben.

The third quarter growth slowdown reflected mostly the impact of Beijing’s retaliatory tariffs on U.S. exports, including soybeans. Farmers front-loaded shipments to China before the tariffs took effect in early July, boosting second-quarter growth. Since then, soybean exports have declined every month, increasing the trade deficit.

Imports increased a little faster in the third quarter than previously estimated, while the drop in exports was much sharper, leading to an even wider trade gap, which slipped off 1.91 percentage points from GDP growth in the third quarter, instead of the 1.78 percentage points reported last month. That was the most since the second quarter of 1985.

The rebound in imports was partly driven by strong domestic demand and also reflected a rush by businesses to stockpile before U.S. Import duties, mostly on Chinese goods, came into effect late in the third quarter.

Imports subtract from GDP growth. Men en del af importen var sandsynligvis i lagre, og blev tilført lagerlagret, som bidro til BNP. Inventories increased at an $ 86.6 billion rate, instead of the $ 76.3 billion rate estimated in October.

As a result, inventory investment added 2.27 percentage points to GDP growth. Det var mere enn de 2,07 procentpoints der blev rapporteret sidste måned og var det største bidrag siden fjerde kvartal af 2011.

Vækst i forbrugernes udgifter, som står for mere end to tredjedele af U.S. economic activity, increased at a 3.6 percent rate in the third quarter, down from the 4.0 percent rate estimated in October.

Business spending on equipment increased at a 3.5 percent rate, instead of the previously reported 0.4 percent rate. That was still the slowest pace in two years. The moderation in business spending has been blamed on the import tariffs, which are increasing manufacturing costs for companies such as Caterpillar Inc. ( CAT.N ), 3M Co. ( MMM. N ) and Ford Motor Co. FN.

Some companies including Apple ( AAPL.O ) used their tax windfall to buy back shares on a massive scale.

Graphic: U.S. GDP interactive – tmsnrt.rs/1jLPbzVGraphic: USA-ECONOMY-HOMESALES interactive – tmsnr.rs/1SX25aY

Reporting by Lucia Mutikani; Editing by Andrea Ricci

Our Standards: The Thomson Reuters Trust Principles.

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