WASHINGTON — The U.S. economy expanded at a solid 3.5
The Commerce Department's figure for gross domestic product, released Wednesday, was the same as its first estimate last month. GDP is the broadest measure of the nation's output of goods and services and covers everything from homebuilding to haircuts. Greater corporate investment offset downward revisions in spending by state and local governments and consumers.
The third quarter figure follows a robust expansion of 4.2
Borrowing costs are headed higher as the Federal Reserve raises short-term interest rates. That has lifted mortgage rates and weighed on home and auto sales. The Trump administration's trade fights have also raised uncertainty for many companies and may cause them to delay investments. And the boost to consumer spending from last year's tax cuts is likely to fade by next year.
The Trump administration has imposed tariffs on about half the goods that the United States imports from China, and has threatened to impose tariffs on the rest. That would raise prices on billions of dollars of consumer goods, including smartphones, tablets, toys and shoes.
"A trade war remains the biggest downside risk to near-term growth," said Gus Faucher, chief economist at PNC.
Economists at JPMorgan Chase forecast that growth will slow to 2.5
Even so, growth is on pace to top 3
Consumers lifted their spending 3.6
Those declines were offset by greater business investment: Companies spent more on equipment and did not cut back nearly as much on their spending on buildings as initially estimated. Businesses also spent more to stockpile goods on store shelves and in warehouses.
The inventory building occurred as businesses stepped up their efforts to import more goods before January, when U.S. tariffs on $200 billion of imports from China are expected to jump to 25
Imports surged 9.2
Exports fell 4.4
The drop in exports and increase in imports in the third quarter meant that international trade cut into growth by the most since 1985.
Christopher Rugaber, The Associated Press