US economic growth met expectations in the second estimate released on Wednesday, while inflation pressures showed signs of easing, according to the Federal Reserve’s preferred inflation gauge.
US economy grows as forecast in third-quarter
The US economy grew at an annualized rate of 2.8% quarter-on-quarter in the three months ending September 30, matching the previous estimate.
"The revision was mainly due to upward adjustments in private inventory investment and non-residential fixed investment, alongside downward revisions in exports and consumer spending. Imports, which are subtracted from GDP calculations, were also revised down," the BEA noted.
This marked a slowdown from the 3.0% growth in the second quarter.
BEA explanation
The BEA explained that the deceleration from the second to third quarter was primarily driven by a decline in private inventory investment and a larger drop in residential fixed investment. However, these were partly offset by stronger exports, consumer spending, and federal government spending, while imports grew faster.
Meanwhile, the core personal consumption expenditures (PCE) inflation index, which the Fed closely tracks, slowed to 2.1% quarter-on-quarter in the third quarter, down from 2.8% in the second quarter. The first estimate had put the growth rate at 2.2%, so the latest figure represents a downward revision.
