U.S. real gross domestic product (GDP) grew at an annualized rate of 3.5 percent in the third quarter of 2018, according to the second estimate of the third quarter released by the Bureau of Economic Analysis (BEA) on Wednesday.
The second quarter’s 4.2-percent annualized rate was the best quarter for the U.S. economy in years. The third quarter’s 3.5-percent rate is still strong, marking the second-best quarter of real GDP growth in the U.S. since 2015.
The economy is blazing! It boosted corporate profits to the highest rate in six years.
Adjusted corporate earnings before taxes rose 3.4% in the third quarter.
More notably, profits in the past 12 months have climbed at a heady 10.3% clip, the fastest increase since 2012.
The reason it is happening is households and state and local governments spent less than originally reported, for one thing. And business investment was not as weak as initially believed, Market Watch reports.
Market Watch further reported:
Investment in equipment climbed 3.5% vs. virtually no increase in the preliminary estimate. And spending on structures such as office buildings and drilling rigs fell just 1.7% instead of 8%.
The production of unsold goods, or inventories, was also stronger. They rose at a revised $86.6 billion annual rate vs. an initial $76.3 billion. Inventories add to GDP.
Exports fell at a slightly bigger 4.4% annual clip. The increase in imports was little changed at 9.2%. A bigger trade deficit subtracts from GDP.
The rate of inflation was marked down a notch to a 1.5%.
The market is picking up again.
The predictions were far more negative.