President Trump
Latest official figures have revealed that the growth in American economy is being powered by robust business spending.
Gross domestic product in the world’s largest economy rose at an annualised rate of 3.2 per cent in the third quarter, the commerce department said in its last of three estimates, down from its second estimate of 3.3 per cent growth. Gross domestic output, which is considered by many economists to be a better measure of growth, was revised down to 2.6 per cent from 2.9 per cent.
President Trump has pledged annual growth of 3 per cent by 2021, a somewhat ambitious goal that could be attained now that he has pushed sweeping tax cuts through Congress.
Third-quarter GDP in the US rose at the fastest pace since the first quarter of 2015, up from 3.1 per cent in the second quarter. It is the first time since 2014 that growth was 3 per cent or more in two consecutive quarters.
Ben Herzon, an economist at IHS Markit, said: “We made no change to our forecast that GDP will rise at a 2.9 per cent annual rate in the fourth quarter.”
Business equipment investment was revised up to a 10.8 per cent annual rate, the fastest in three years, from 10.4 per cent. Growth in consumer spending, which accounts for about two thirds of the US economy, was revised down to 2.2 per cent from 2.3 per cent.
America’s quarterly GDP estimates are compared with figures from a year before whereas the UK’s are set against the previous quarter. Gross domestic output is an average of GDP and gross domestic income (GDI) — the sum of all income earned from producing goods and services within an economy. Third-quarter GDI was revised down to 2 per cent annualised from 2.5 per cent.
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