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GDP Report Released, Beats Economists' Expectations

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The U.S. economy grew at a faster than expected rate during the third quarter, fueled by strong consumer spending.

The Commerce Department reported for July through September the Gross Domestic Product rate was 3.5 percent, slightly higher than the 3.4 percent predicted by economists surveyed by The Wall Street Journal.

Meanwhile, inflation grew at a slower rate than expected for the quarter, 1.6 percent PCE (price consumption expenditures).

Economists polled by StreetAccount had anticipated a 2.2 percent increase, CNBC reported.

“Consumer spending, which accounts for more than two-thirds of total economic output, rose at a 4.0% annual rate in the third quarter, the strongest rate of growth in nearly four years,” according to The Journal. “A low unemployment rate, steady job and wage growth and the late-2017 tax overhaul encouraged spending by consumers.”

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The paper noted that the tax cut passed last December was a central pillar of President Donald Trump’s plan to boost economic growth to above 3 percent annually, which was a mark consistently seen during the economic expansions in the 20th century.

During former President Barack Obama’s time in office, the economy averaged just under 2 percent growth annually, which was the worst recovery from a recession since the Great Depression.

The GDP growth rate was 1.6 percent during his final year in office.

Vice President Mike Pence touted the third quarter GDP growth number in a tweet on Friday morning.

“Under @POTUS Trump, the American economy is making a REAL COMEBACK after nearly a decade of slow growth,” he wrote. “Consumer confidence has hit a nearly 20-year high, 4.2 million jobs have been created, and Q3 GDP growth is at 3.5%. AMERICA IS BACK!”

The 3.5 percent growth is slightly down from the 4.2 percent seen during the second quarter.

The Commerce Department indicated it could not estimate the overall impact of Hurricane Florence on the economy, which hit North Carolina in mid-September.

“The headline was not too far from expectations, but we did get a few surprises. Consumer was stronger than we expected,” Scott Brown, chief economist at Raymond James, told The Journal.

Trump’s top economic adviser Larry Kudlow predicted after the second quarter GDP number exceeded expectations, the economy would continue to experience strong economic growth.

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Do you think the U.S. will continue to experience strong economic growth in the coming months?

“I don’t think this is the end of the numbers,” he said in July. “I was watching some TV this morning saying, ‘Wow, they got one, but it’s not sustainable’… Bulletin, it is sustainable.”

Kudlow explained, “We’ve lowered tax rates, we’ve rolled back regulations, we’ve unleashed energy, we’re moving to fix the broken world trading system. You can see big numbers on capital spending, business investment.”

“My hunch is it’s going to go on for quite a while. It’s not just one quarter,” he said.

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Randy DeSoto has written more than 2,000 articles for The Western Journal since he joined the company in 2015. He is a graduate of West Point and Regent University School of Law. He is the author of the book "We Hold These Truths" and screenwriter of the political documentary "I Want Your Money."
Randy DeSoto is the senior staff writer for The Western Journal. He wrote and was the assistant producer of the documentary film "I Want Your Money" about the perils of Big Government, comparing the presidencies of Ronald Reagan and Barack Obama. Randy is the author of the book "We Hold These Truths," which addresses how leaders have appealed to beliefs found in the Declaration of Independence at defining moments in our nation's history. He has been published in several political sites and newspapers.

Randy graduated from the United States Military Academy at West Point with a BS in political science and Regent University School of Law with a juris doctorate.
Birthplace
Harrisburg, Pennsylvania
Nationality
American
Honors/Awards
Graduated dean's list from West Point
Education
United States Military Academy at West Point, Regent University School of Law
Books Written
We Hold These Truths
Professional Memberships
Virginia and Pennsylvania state bars
Location
Phoenix, Arizona
Languages Spoken
English
Topics of Expertise
Politics, Entertainment, Faith




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