The Economy – Full Steam Ahead

KEY TAKEAWAYS

• The economy expanded at a 3.5 percent inflation-adjusted annualized rate in the third quarter of 2018, following growth of 4.2 percent in the second quarter.
• This is the highest back-to-back growth in four years.
• GDP continues to expand at a robust rate due to strong pro-growth policies.

The nation’s economy grew at an inflation-adjusted annual rate of 3.5 percent in the third quarter of 2018. This follows 4.2 percent growth in the second quarter, 2.2 percent growth in the first quarter, and also 2.2 percent growth for 2017 as a whole. Growth in each quarter of 2018 has now topped its respective quarter in 2017.

Changes to GDP Components from Q2 to Q3, 2018

In the second quarter, personal consumption expenditures grew at 4 percent on an annualized basis. Gross private domestic investment expanded by 12 percent, the highest level in three years. Exports shrank by 3.5 percent. Imports, a subtraction from GDP, increased by 9.1 percent. Federal government spending grew by 3.3 percent, while state and local government spending grew by 3.2 percent.