Economic Growth Fell to 1.9% in Third Quarter

The container ship Kota Ekspres is unloaded at the Port of Oakland in Oakland, Calif., on July 22, 2019. (AP Photo/Ben Margot)

(CN) – The U.S. economy slowed slightly from July to September and grew at a 1.9% rate, as business investments continued to fall and consumer spending fell behind the previous quarter.

The growth in the gross domestic product, a primary indicator of economic health, is down from 2% in the second quarter.

While the GDP gain slowed, it still beat expectations. A Dow Jones poll of economists had predicted a third-quarter growth rate of just 1.6%.

Economists expect yearly growth of about 2.5% in 2019, down from 2.9% last year.

President Donald Trump’s administration has been projecting annual GDP growth of 3%, which would be well above the 2.2% average annual rate seen during the current economic expansion. The economy entered its 11th consecutive year of growth this summer, the longest streak on record.

Accounting for most economic activity, consumer spending increased by 2.9% from July to September, compared to 4.6% in the second quarter, according to a Commerce Department report released Wednesday.

Business investments continued to fall with a 1.5% decrease in the third quarter, but that is up from the 6.3% drop from April to June.

The investment downturn could be seen as a sign of uncertainty caused by President Trump’s trade war with China and a slowing global economy.

Trump has blamed the Federal Reserve for the slower rate of growth, despite the central bank slashing rates two times so far this year. The Fed is expected to cut its key interest rate a third time on Wednesday afternoon, as inflation has stayed below the 2% annual target.

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