Investing.com - The U.S. grew 3.5% in the third quarter according to data released Wednesday, confirming an initial estimate and leaving the American economy on track for its best yearly expansion since 2005.
The Bureau of Economic Analysis reported that GDP registered a seasonally-adjusted annual rate of 3.5% growth in the three-month period from July to September. That was just lower than economists’ expectations for a rise to 3.6%.
Analysts expect the robust expansion to continue in the fourth quarter - although likely at a slower rate - amid forecasts that growth will also moderate in 2019 due to the possible fallout from simmering trade disputes, particularly between the U.S. and China.
The most recent IHS Markit surveys on business activity pointed to growth of 2.5% in the last three months of the year, matching the current forecast from the Atlanta Fed.
“The US economy has performed really well this year with a robust jobs market and massive tax cuts helping to generate the strongest year of GDP growth since 2005. But maintaining this momentum in 2019 will be hard, given the headwinds of the lagged effects of the strong dollar and higher interest rates along with the fading support from the fiscal stimulus and intensifying trade protectionism at a time of softer global growth,” ING chief international economist James Knightley said.
Chris Williamson, IHS Markit’s chief business economist, also signaled that the slowdown may already be underway as companies grew somewhat less optimistic about the outlook in November and decreased growth in hiring.
“Goods exports also appear to also be coming under increasing pressure, often linked to trade wars having dampened demand,” he added.