Editor’s note: Beth Akers responds to the latest GDP estimate for the third quarter of 2019 released by the Bureau of Economic Analysis.
The U.S. economy grew by 2.1% in the third quarter of 2019, according to new data released this morning. This is up slightly from the second quarter of the year (2.0), but is significantly below the strong growth (3.1) that set off the year in the first quarter.
This report confirms earlier estimates. The only surprises were the sources of growth. Consumer spending supported more growth than anticipated and investment in inventories lagged below the earlier estimate. These offset one another, leaving the final figure the same as previously estimated.
This level of GDP growth reflects an economy in moderate expansion. The growth is fueled by record low levels of unemployment and is certainly being helped by the expansionary interest rate policy employed by the Federal Reserve in recent cycles.
With most forecasts predicting moderately slower growth in 2020, I anticipate a series of less encouraging GDP reports in the coming months.
______________________
Beth Akers is a senior fellow at the Manhattan Institute and a former Council of Economic Advisors economist. Follow her on Twitter here.