Exports drive Us growth in third quarter – Daily Management

GDP U.S. increased at an annual rate of 2.9% after expanding 1.4% in the second quarter, today said the Commerce Department in its first estimate for July-September.

Washington (Reuters).- The U.s. economy grew at its fastest pace of the last two years in the third quarter thanks to a rise in exports and a rebound in inventories offset the slowdown in consumer spending.

The GDP rose at an annual rate of 2.9% after expanding 1.4% in the second quarter, said on Friday the Commerce Department in its first estimate for the period July-September.

it Was the rate of growth strongest since the third quarter of 2014 and exceeded the expectations of a poll Reuters of economists of a rise of the GDP at an annual rate of 2.5%.

Despite the moderation in consumer spending, progress in the expansion of the third quarter could help to dispel fears that the economy is at risk of stagnating. In the first half of 2016, the growth had averaged just 1.1%.

even Though the Federal Reserve is mainly concentrated in the employment numbers and inflation, signs of economic strength would be support for an increase in interest rates in December. The central bank american raised its reference-type to the end of 2015 for the first time in nearly a decade.

consumer spending, which represents more than two-thirds of the economic activity of the united States, rose at a rate of 2.1% between July and September, giving support to the economy, though its pace slowed from a solid 4.3% in the second quarter.

An increase in soy exports are allowed to decrease the trade deficit. Exports climbed 10%, the highest rate since the end of 2013. The trade contributed 0.83 percentage point to the expansion of the GDP, from as low as 0.18 prior, but it is feared that the growth of exports led by soybeans can be reversed in the fourth quarter.

businesses increased their spending on inventories after reducing their inventories in the second quarter. Accumulated US$ 12,600 million in inventories in the third quarter -contributing 0.61 percentage point to the growth of the GDP, though investment in machinery and equipment remained weak.