US GDP grows at solid 2.8% pace, helped by consumer spending

The economy’s primary growth engine — consumer spending — advanced 3.5%, the most this year.

The US economy expanded at a solid pace in the third quarter, largely powered by a broad-based advance in consumer spending as inflation continued to cool.

Gross domestic product increased at a 2.8% annualised pace in the third quarter, the second estimate of the figures from the Bureau of Economic Analysis showed Wednesday. The economy’s primary growth engine — consumer spending — advanced 3.5%, the most this year.

The GDP report showcases the durability of an economic expansion that’s been tested by lingering price pressures, high borrowing costs and political uncertainty. While progress on inflation has leveled out more recently, the Federal Reserve has started reducing interest rates.

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With Donald Trump sealing his return to the White House, American businesses and consumers now await the roll-out next year of his economic agenda.

The government’s other main gauge of economic activity — gross domestic income — rose 2.2%, after a revised 2% annualised pace in the second quarter. Whereas GDP measures spending on goods and services, GDI measures income generated and costs incurred from producing those same goods and services. The average of the two growth measures in the third quarter was 2.5%.

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