Official US figures show that in the third quarter, the economy has grown at an annualised rate of 3.5 per cent.
Strong consumer and government spending were the primary drivers for this growth, said the US Commerce Department.
But growth was weighed on by lower exports following an increase in the previous quarter when exporters were pushed to force more shipments in order to avoid the Trump tariffs.
Compared to the second quarter when the US economy grew at 4.2 per cent, the third quarter growth rate came at 3.5 per cent which was a slower rate compared to the previous quarter. The number was however better than the 3.3 per cent growth that was predicted by economists.
“Growth downshifted a bit in Q3 and we look for some further slowing in the quarters ahead,” analysts at Wells Fargo wrote.
“That said, the US economy continues to grow in excess of the rate that most analysts consider to be its long-run potential growth rate.”
It is expected that in 2018, the US growth rate would be at 3 per cent which would mar the fastest growth rate in over a decade.
This growth rate is accompanied by some positive signs in the economy which includes higher spending because of government policies such as $1.5tr tax cut and an expanded military budget and with rates of unemployment at record lows.
There was an annual growth rate of 4 per cent in consumer spending in the third quarter which is important because consumer spending accounts for more than two thirds of gross domestic product. The rate of growth in the previous quarter was 3.8 per cent.
On the overall, the GDP saw an increase of 3 per cent in the third quarter compared to the same period in 2017.
But some signs that the environment for growth may be weakening was also seen in the Commerce Department report.
While housing expenditures fell 4 per cent, business investment increased at an annualised rate of less than 1 per cent.
The rate of growth for exports of goods dropped by 7 per cent in the third quarter compared to a growth of 13.5 per cent in the previous quarter.
This drop was because of a slew of duties on American-made products which were implemented this summer which were a result of the new US tariffs on foreign steel and aluminium imposed by the Trump administration in addition to import tariffs on billions of dollars worth of Chinese goods.
But this report is sure to please the Republicans.
The positive economic data gives President Trump’s party yet another data point to put to use in election campaigning for the competitive midterm elections which are just a little over week away.
(Adapted form BBC.com)