The US economy grew at a rate of 3.5% in the third quarter

Consumer spending, which accounts for more than two-thirds of total economic output, grew 4.0% per year in the third quarter, the highest growth rate in almost four years. A low unemployment rate, steady growth in employment and wages, and the redesign of taxation at the end of 2017 encouraged consumers to spend money.

Federal government spending increased 3.3% per year in the third quarter, while defense spending grew by 4.6% annually. State and local government spending has also increased by 3.2% per year, an acceleration that is helping to fuel overall economic activity.

However, some analysts see an imminent slowdown.

"We see five reasons for more modest growth: a boost to fiscal stimulus; rise in inflation; tightening of monetary policy; growing protectionism and slowdown in global activity, "said Gregory Daco, an economist at Oxford Economics, in a note addressed to his clients.

The increase in borrowing costs seems to have negative consequences in two sectors that consumers generally have to finance: home and car purchases. Spending on motor vehicles and spare parts added only 0.09 percentage points to GDP in the third quarter.

The housing sector slowed growth for the third consecutive quarter. Residential fixed investment fell 4.0% in the third quarter. This is likely to be the result of rising short-term interest rates, weak housing stocks, and changes in the tax code that have reduced the benefits that have existed for decades and have favored the economy. home ownership.

In addition, business investment was surprisingly slow. Fixed non-residential investment, reflecting spending on commercial construction, equipment and intellectual property products such as software, increased only 0.8% in the third quarter, after an increase of 8%, 7% in the second quarter and 11.5% in the first.

The corporate investment rate in the third quarter was the lowest since the fourth quarter of 2016. Structural spending decreased 7.9% in the third quarter.

Private stocks added 2.07 percentage points to the third quarter growth rate, a reversal from the second quarter, when companies reduced their inventories to outpace retaliatory rates.

Exports fell in the third quarter, registering a 3.5% annual decline, negatively impacted by international trade. Imports increased at a rate of 9.1% as Americans increased their purchases of foreign goods.

"Ultimately, final domestic demand is growing faster than domestic supply, so the downward trend in the deficit will continue to deteriorate," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

The Commerce Department said it was not possible to estimate the overall impact of Hurricane Florence on GDP, which hit the coast of North Carolina in mid-September.

After eliminating volatile categories of trade, stocks and government spending, final sales of domestic product increased at an annual rate of 1.4%, lower than the overall GDP figure.

The $ 1.5 trillion tax cut adopted by Congress at the end of last year is one of the pillars of President Trump's plan to revive economic growth at a rate of over 3% strong expansions of the twentieth century.

Production rose 3.0% in the third quarter compared to the same period in 2017. Fed officials expect growth to reach a rate of 3.1% in the fourth quarter of this year compared to the previous year. However, they expect 1.8% growth in the long run.

Write to Harriet Torry at [email protected]