Strong consumer spending drives steady growth of 2.8% in U.S. GDP in the third quarter

According to the Zhitong Finance APP, the U.S. economy expanded steadily in the third quarter, largely due to broad growth in consumer spending, while inflation continued to cool. The second report released by the U.S. Bureau of Economic Analysis on Wednesday showed that the annualized growth rate of Gross Domestic Product (GDP) in the third quarter was 2.8%, slowing from 3% in the previous quarter, but in the past nine quarters, the growth rate exceeded 2% in eight quarters. The main growth engine of the economy—consumer spending—grew by 3.5%, the highest level so far this year. The GDP report indicates that the durability of economic expansion is being tested by persistent price pressures, high borrowing costs, and political uncertainty. Although recent progress on inflation has stabilized, the Federal Reserve has begun to cut interest rates. With Trump returning to the White House, U.S. businesses and consumers are now waiting for the rollout of his economic agenda next year. Another key indicator the government uses to measure economic activity—Gross Domestic Income (GDI)—grew by 2.2%, with the revised annualized growth rate for the second quarter at 2%. GDP measures spending on goods and services, while GDI measures the income and costs generated from producing those goods and services. The average growth rate of these two indicators in the third quarter was 2.5%. GDI data includes corporate profit data. After-tax profits showed little change. In the previous quarter, the proportion of profits from non-financial corporations to total value added (a measure of overall profit margins) slightly increased from 15.5% in the previous quarter to 15.6%. Recently, Trump's victory has added momentum to the stock market, partly because many traders believe his economic agenda will continue to boost corporate profits. The incoming president has vowed to cut corporate taxes and impose punitive tariffs on goods exported from other countries, in addition to appointing Wall Street executives to lead the Treasury and Commerce Departments. On the other hand, some economists are concerned that Trump's fiscal plan will put upward pressure on inflation. The GDP report shows that the Federal Reserve's preferred measure—the Personal Consumption Expenditures Price Index—had an unadjusted annualized growth rate of 1.5% in the third quarter. Excluding food and energy, the core Personal Consumption Expenditures Index rose by 2.1%, higher than the previously expected 2.2%