Real gross domestic product (GDP) for the United States increased at an annual rate of 3.5% in the third quarter (Q3) of 2018 according to the advance estimate released by the Bureau of Economic Analysis.
Economic expansion (without a recession) is now in its ninth year and the second longest on record. However, business spending stalled, and residential investment declined for a third straight quarter, perhaps the boost from the $1.5 trillion tax cut was now fading.
An increasing trade deficit had a negative impact of 1.78% on GDP growth in the third quarter, the most since the second quarter of 1985.
Inventories increased at a $76.3 billion rate after declining at a $36.8 billion pace in the second quarter. Business investment increased at an annualised rate of less than 1%, while housing expenditures fell 4%, the third quarter in a row of contraction. The housing market contracted at its steepest pace in more than a year in the third quarter, dimming the economy’s outlook.
Growth in consumer spending (which accounts for about 70% of U.S. GDP), increased at a 4% in the third quarter, the fastest pace since the fourth quarter of 2014.
Disposable personal income increased $155 billion, or 4.1% in the third quarter, compared with an increase of $168.9 billion, or 4.5% in the second quarter. Real disposable personal income increased 2.5%, the same increase as in the second quarter.
Personal saving was $999.6 billion in the third quarter, compared with $1,054.3 billion in the second quarter. The personal saving rate as a percentage of disposable personal income was 6.4% in the third quarter compared with 6.8% in the second quarter.
The U.S. economy is set to contribute its highest share of global GDP since 2007 as other economies everywhere else stumble
U.S. Q2 2018 GDP estimated at 4.1% as personal consumption soars but wage growth collapses
U.S. Q1 2018 GDP estimated at 2.3% as personal consumption collapses; wage growth highest in a decade; personal saving rate falls