The US economy fell short of expectations in the third quarter of this year, taking a toll on inflation-weary voters less than a week before the presidential election.
Gross domestic product (GDP), which is a measure of all goods and services produced in the three months from July to September, expanded at an annual rate of 2.8 percent.
That’s down from a 3 percent pace in the second quarter, according to data released Wednesday by the Commerce Department.
Economists surveyed by Dow Jones expected a 3.1 percent increase.
Despite spending more, American consumers have been pessimistic about their job and financial prospects, and Democratic Vice President Kamala Harris remains behind Republican Donald Trump in opinion polls on the economy.
The US economy fell short of expectations in the third quarter of this year, taking a toll on inflation-weary voters less than a week before the presidential election.
“If you looked at numbers like GDP growth or income or consumption, or even employment, you’d say, ‘Gosh, this economy is in pretty good shape,'” said Dan North, senior economist at Allianz Trade North America.
“The only thing that completely destroys that narrative is the inflation that consumers have had to face,” he told AFP.
While GDP growth fell short of expectations for the quarter, U.S. growth this year is expected to outpace other advanced economies such as Germany, France and the United Kingdom, according to recent estimates from the International Monetary Fund.
Bret Kenwell, US investment analyst at eToro, said that with the Federal Reserve in a cycle of rate cuts, every major economic report is now being scrutinized to determine when and by how much the Fed will cut interest rates. interest.
The central bank cut interest rates in September for the first time since 2020, bringing benchmark borrowing costs down from a multi-decade high.
He said that while the GDP report fell short of economists’ expectations, the error was minor and reaffirms that the U.S. economy remains on solid footing.
“Solid but not dizzying growth fits very well in the current economic context,” he said in a statement.
“A number that is too good and investors would likely question the Federal Reserve’s decision to cut rates by 50 basis points in September, while a weak GDP number could reignite concerns about the deteriorating economy.”
Gross domestic product (GDP), which is a measure of all goods and services produced, expanded at an annual rate of 2.8 percent between July and September.
The Commerce Department said the GDP figure reflected “increases in consumer spending, exports and federal government spending.”
An October survey of likely voters by the New York Times and Siena College released last week showed that economic issues remained a priority about two weeks before the election.
Respondents were slightly more inclined to trust Trump to do a better job managing the economy, with 52 percent of respondents preferring him to 45 percent supporting Harris.