A visualization of a consistently expanding US economy, intensified by well-grounded consumer layout and defying threats has been cast based on a long series of the current government reports. According to estimation by the Commerce Department, the economy has grown moderately over the summer with about 2.1% annual rate, somewhat better than what was estimated. Higher consumer spending and a major decline in orders for ultra-expensive manufactured goods have been observed by some other reports.
The July-September quarter saw a rise in the GDP (Gross Domestic Product), along with massive growth in the total output of goods and services produced by the economy. This result exceeded the 1.9% annual rate estimated a month ago. The businesses didn’t rollback on investment spending as initially estimated, which made this growth feasible.
The economy had commenced with an astounding 3.1% GDP rate, fueled mainly by the now-faded consequences of the escalated government spending and tax cuts.
With the further weakening of the business investment, GDP growth is most likely to be slowed down to an approximately 1.4% annual rate in the October-December quarter, as expected by many analysts. But the slowdown might not be a dreadful one as the consumers have signaled that they will most probably keep spending throughout the holiday season. Rising incomes along with a satisfactory unemployment rate support that sort of spending.
On entering the last three months, consumer spending acquired some momentum with a rise by a 0.3% annual rate last month. The US manufacturing sector, struggling with trade conflicts under Trump’s administration and global economic damage and weakness, has ordered for a rebound of the ultra-expensive items in October.
The flurry of information portrays an economy that is recovering its foundation after absorbing risks this year, from aggravating trade conflict with China to the global downshift, which has prolonged dilemmas for businesses. Plans to invest and expand have been suspended by many companies. Still, a prefatory US-China endorsement can soon be reached, as optimistically predicted by the stock market.
The GDP growth may slightly slow down in the last quarter but it won’t be as critical as the initial estimations, reported by the Capital Economists’ analysts. Growth of approximately 2% has been envisioned for the year 2020 by economists.
With the escalation of the trade war between the US and China, a slowdown in global growth, and the huge loss suffered by the financial markets made the analysts worried about an upcoming recession in the economy.