INSUBCONTINENT EXCLUSIVE:
previously estimated, but the pace was likely strong enough to keep growth on track to hit the Trump administration's 3 per cent target this
year, even as momentum appears to have moderated further early in the fourth quarter.Gross domestic product increased at a 3.4 per cent
annualised rate, the Commerce Department said on Friday in its third reading of third-quarter GDP growth
That was slightly down from the 3.5 per cent pace estimated in October and well above the economy's growth potential, which economists
estimate to be about 2 per cent.The revisions to the third-quarter GDP reading reflected markdowns to consumer spending and exports
Inventory accumulation was, however, much bigger than previously estimated
There were downward revisions to business spending on equipment and nonresidential structures, as well as residential investment.The economy
grew at a 4.2 per cent pace in the April-June quarter.The Federal Reserve raised interest rates on Wednesday for the fourth time this year,
but forecast fewer rate hikes next year and signaled its tightening cycle is nearing an end in the face of financial market volatility and
slowing global growth.The US central bank slightly lowered its growth projections for 2019.Growth is being driven by the Trump
administration's $1.5 trillion tax cut package, which has given consumer spending a jolt
The fiscal stimulus is part of measures adopted by the White House to boost annual growth to 3 per cent on a sustainable basis.But the
economy appears to be slowing in the fourth quarter amid a widening trade deficit, sluggish business spending on equipment and a weak
housing market.The slowdown in growth is expected to spill over into 2019 as the fiscal stimulus fades and a bitter trade war with China and
strong dollar undercut manufacturing
Growth estimates for the fourth quarter are around a 2.9 per cent pace.An alternative measure of economic growth, gross domestic income
(GDI), increased at a rate of 4.3 per cent in the third quarter, instead of the 4.0 per cent pace reported last month.The average of GDP and
GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at an unrevised a 3.8 per
cent rate in the July-September period.After-tax corporate profits were revised up to show them rising at a 3.5 per cent rate in the third
quarter instead of the previously estimated 3.3 per cent rate
Corporate profits rose at a 2.1 per cent pace in the April-June period.Inventories increased at an $89.8 billion rate, instead of the $86.6
billion rate estimated in November
Inventory investment added 2.33 percentage points to GDP growth
That was more than the 2.27 percentage points reported last month and was the biggest contribution since the fourth quarter of 2011.Consumer
spending, which accounts for more than two-thirds of US economic activity, increased at a 3.5 per cent rate in the third quarter, slightly
down from the 3.6 per cent rate estimated in November.
