Economic growth in the U.S. slowed in the third quarter, according to a report released by the Commerce Department on Friday, although the pace of growth still exceeded economist estimates.
The Commerce Department said real gross domestic product advanced by 3.5 percent in the third quarter after surging up by 4.2 percent in the second quarter. Economists had expected GDP growth to slow to 3.3 percent.
The slowdown in the pace of growth in the third quarter came after the jump in the second quarter represented the fastest growth since a 4.9 percent spike in the third quarter of 2014.
The bigger than expected increase in GDP reflected positive contributions from personal spending, private inventory investment, government spending and non-residential fixed investment.
Meanwhile, negative contributions from exports and residential fixed investment limited the upside along with an increase in imports, which are a subtraction in the calculation of GDP.
The slowdown in GDP growth compared to the previous quarter reflected a downturn in exports and a deceleration in non-residential fixed investment, which were partly offset by an upturn in private inventory investment.
The report said the pace of growth in consumer spending, which accounts for about 70 percent of the economy, accelerated to 4.0 percent in the third quarter from 3.8 percent in the second quarter.
“Another decent growth number will be welcome news for President Trump, but for markets, the bigger question is where the economy goes next,” said ING economists James Smith and Jonas Goltermann.
Smith and Goltermann added, “We see no reason to expect an imminent correction, although growth may begin to ease in 2019 as higher rates bite and fiscal tailwinds fade.”
On the inflation front, the Commerce Department said its reading on core consumer prices, which exclude food and energy prices, showed price growth slowed to 1.6 percent in the third quarter from 2.1 percent in the second quarter.