U.S. Economy Sees 3.5% Growth in Third Quarter

The U.S. economy had another strong growth quarter, recording a 3.5% increase in gross domestic product (GDP) during the third quarter. Although this might not be as impressive as the 4.2% growth in Q2, it did come in a bit higher than observer estimates and continues to put President Trump on track to reach his 3% annual growth goal for 2018. As CNN Business reports, this also marks the sixth consecutive quarter where growth exceeded 2%.

There are a few reasons why the third quarter results took a dip from the previous quarter. For one, business investment took off earlier in the year thanks to the GOP-backed tax reform bill. Additionally many exporters rushed to beat various deadlines before tariffs went into effect in China and elsewhere. As a result, net exports were down in Q3.

Elsewhere disposable personal income during the quarter increased by 2.5%. However consumer spending well outpaced that, growing 4%. This caused Bank of the West chief economist Scott Anderson some concern, first noting, “Four percent growth is a phenomenal performance,” before adding, “We don’t think that’s sustainable. We think spending is getting a little ahead of incomes. Some of those interest-rate sensitive spending categories are going to feel more pressure as interest rates continue to rise.”

Unfortunately these strong GDP numbers don’t seem to be helping Wall Street shake off its correction blues. In fact, as of this writing, the Dow Jones Industrial Average has given up nearly all of the gains its made so far this year.

Another interesting economic wrinkle that’s come out in the last couple of days is a new survey that asked Americans if their finances had improved under President Trump. According to the Bankrate survey as reported on by MarketWatch,  38% of respondents shared that their finances have improved since November 2016 (note: the President didn’t take office until January 2017). Meanwhile 17% said they’ve actually gotten worse with the other 45% stating they’ve been about the same. Bankrate’s senior economic analyst Mark Hamrick explained these findings, saying, “Ultimately, a rising economic tide lifts many boats. It does not lift all of them. The economy is paying dividends for many Americans, but there are still many people and pockets of the U.S. economy that are hoping for those dividends to appear.”

While the financial focus this week may be set on the slumping Wall Street, these preliminary third quarter GDP results show that the U.S. economy is still chugging forward. Moreover CNN notes that any annual growth figure above 3% would mark the highest since 2005. Obviously we’ll have to see if the market woes and continued trade war slow things down in the fourth quarter but, for now, that milestone seems to be in sight.


Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Top 10 Personal Finance Articles of the Month — June 2022 

It’s time again for one of my favorite features here on Dyer News: a look at the top 10 personal finance articles of the month. To start, we'll take another look at financial independence and freedom. Then, with the housing market going a bit crazy lately, we'll feature a pair of articles on home buying. Lastly, we'll cover tips for one-income households, finance after death, fighting inflation, and more. As...

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...

Cash App Introduces Round-Up Investing Feature for Debit Card

Debit card customers looking to grow their investments gained a new, automated option today as Block Inc. (formerly Square Inc.) officially announced a new feature for its popular Cash App. Now, customers with the Cash App Cash Card can opt into Round Ups as a means of growing their investments. When this feature is toggled on, Cash App will round up debit card purchases to the nearest dollar and invest...