US beats GDP predictions as consumers continue to spend
US GDP down on same time last year at 1.9 per cent
US Gross Domestic Product (GDP) for the third quarter of 2019 has beaten expectations, rising to an annualised rate of 1.9 per cent instead of a predicted 1.6 per cent.
The Commerce Department attributed this growth to continued consumer spending and increased government expenditure. Personal consumption spending, a measure of expenditure by household, rose by 2.9 per cent while government spending grew by 2 per cent.
The report coincided with the news that US private employers added 125,000 jobs in October, similarly beating expert predictions.
Despite the positive figures the report showed a rise in national debt. President Donald Trump once vowed to eliminate this, however it continues to rise and currently stands at around $22.9 trillion (£17tn, €19.8tn). Furthermore real (rather than nominal) US GDP, which adjusts for inflation, has fallen 35 per cent in the past year, down from 2.9 per cent growth in Q3 2018.
Gross private domestic investment has continued to decline in Q3, though the rate of decline was not as bad as Q2’s drop of 6.3 per cent. This quarter, it fell by 1.5 per cent. Fears of the US-China trade war contributed to a deterioration in private business investment.
President Trump has repeatedly called on Federal Reserve chair Jerome Powell to lower interest rates and thus sustain growth and his ability to wage a trade war. He, alongside investors around the world await Powell’s speech later today.