LEAD 1-USA-T3 growth confirmed at 3.5% in 2nd estimate

(Updated with details, context)

WASHINGTON, Nov. 28 (Reuters) – Growth in the US economy in the third quarter has slowed, as previously announced, but looks strong enough to keep pace with the Trump administration's target of 3 percent this year.

Gross domestic product (GDP) grew 3.5% annualized in July-September, after 4.2% in the second quarter, according to a second estimate released Wednesday by the Commerce Department.

Economists polled by Reuters expected on average confirmed growth to 3.5%.

While companies have accumulated inventories faster and invested more in equipment than initially estimated, consumer spending and exports – affected by increased Chinese tariffs on US products, including soybeans, have been revised falling.

It's been nine years since the US economy has been growing steadily, the second longest run in their history. It relies this year on $ 1.5 trillion in tax cuts and on an increase in public spending put in place by the Trump administration.

But clouds are piling up as business equipment spending seems to have slowed since the start of the fourth quarter and rising interest rates are holding back real estate.

With the relapse of oil prices, investment spending should slow down. In addition, the announcement Monday by General Motors of the loss of thousands of jobs and the discontinuation of production of several models in North America should have an impact.

Solid growth confirmed in the third quarter suggests that the Federal Reserve will continue its monetary normalization policy by raising rates again in December despite repeated criticism from Donald Trump who believes that monetary tightening is beginning to be a drag. Growth estimates for the fourth quarter are currently around 2.5% and economists expect a further slowdown in 2019 with weaker tax support and negative spillover from trade tensions with China and others. partners of the United States.

The slowdown in the third quarter is due, among other things, to the impact of the Chinese retaliatory measures against the rise in US tariffs, which resulted in a peak of shipments before their entry into force in July, thus boosting the growth of second trimester. Since then, soybean exports have declined month after month, widening the trade deficit.

At the same time, growth in household consumption was revised down to 3.6% annualized in the third quarter, compared to 4.0% in the first estimate.

Imports, which have a negative contribution to GDP, have been revised up slightly.

Business spending on equipment grew by 3.5% on an annualized basis, compared to only 0.4% in the first estimate. Even revised up, this figure remains the lowest recorded in two years.

Compared to the third quarter of 2017, the American gross domestic product posted an increase of 3.0%, as announced in first estimate.

The rise in the core price index (PCE), closely followed by the Federal Reserve, was revised down to 1.5% against 1.6% in first estimate. Compared with the third quarter of 2017, it is confirmed at 3.0%.

Table of statistics (Lucia Mutikami, Juliette Rouillon for French service, edited by Marc Angrand)