The US economy continues its strong growth in the third quarter

Real and annualized GDP growth was 3.5% from July to September. Private consumption expenditures, the accumulation of private stocks, state expenditures at the federal, regional and local levels and fixed investments contributed to this. Foreign trade and investment in housing had a negative impact in the third quarter.

The increase in consumer spending reflects the increase in spending on goods, including leisure items, short-term items such as prescription and services, particularly in the health and personal care sectors. l & # 39; hotel. Inventory accumulation mainly concerned the wholesale and industrial sectors.

In the second quarter, real GDP grew by 4.2%. The slowdown in the third quarter is mainly due to higher imports. Exports have reduced exports of agricultural products, including soybeans, but also oil and oil products, as well as capital goods. The increase in imports, on the other hand, was driven by consumer goods and motor vehicles. This development was partially offset by the accumulation of stocks, particularly agricultural goods and manufactured goods.

The contribution of foreign trade to GDP as well as stock development shows the effects of trade policy measures taken by the Trump administration. For example, in the third quarter, soybean exports declined, as China increased tariffs on cereal imports in response to Trump's rights over Chinese products. The reduction in soybean exports has resulted in an increase in stocks on the fly.

It can not be said to what extent Hurricane Florence, which hit the southeastern United States in mid-September and especially the two Carolinas, affected GDP in the third quarter. The Commerce Department notes that the natural disaster has limited the consumption and activity of businesses, including that of utilities electricity and water. On the other hand, the supply of relief and reconstruction services has increased in response to the disaster. All of this is included in the third quarter production numbers, but can not be reported separately.

Expected slowdown

For the fourth quarter of 2018, another slight slowdown is expected. The expansion of the US economy, however, is expected to continue and there is a good chance that this will be the longest phase of post-war expansion. Real GDP growth of about 3% is expected for 2018 as a whole. The longest phase of expansion to date began in March 1991 and ended in March 2001; It lasted exactly ten years. The current expansion phase began in July 2009. If it continues until the beginning of the summer of 2019, it will be the longest after the war.

On average, the eleven phases of post-war expansion lasted 58.4 months, or about five years. However, the recovery is still relatively weak, even though the last two quarters have been marked by acceleration. For the full year 2019, real GDP growth of about 2.5% is expected. A forecast of this size is currently published by the US Federal Reserve, the International Monetary Fund (IMF) and the Congressional Budget Office (CBO).