The U.S. economy grew at an annual rate of 1.9% for the third quarter of 2019 as businesses slowed their investments and consumer spending declined amid a slowdown in global growth and the trade war with China.
An advance estimate from the Commerce Department released Wednesday showed economic growth slowed and gross domestic product for July through September was below the 2% growth rate for the second quarter of the year. But the GDP gain exceeded expectations from analysts who predicted the economy would grow at a slower rate of 1.4%.
The economy grew at a 3.2% annual rate in the first quarter of the year.
Consumer spending, a major driver of economic growth, grew at 2.9% for the three months beginning in July, a downshift from the 4.6% growth in the second quarter of the year.
The Trump administration has set a target for annual economic growth of 3% as President Trump boasts that his policies have led to a record low in unemployment and continued economic expansion. But Trump has also blamed the Federal Reserve for holding back economic growth, calling Fed officials and its chairman “boneheads” for not cutting interest rates to zero and claiming the central bank is “derelict in its duties” if it doesn’t slash rates again.
The Fed has cut rates twice and is expected to do so a third time Wednesday.
Trump’s trade war, coupled with the lower consumer spending, has continued to buffet the U.S. economy. But tensions began to lift this month after the president announced a phase one deal with China.
Beijing agreed to buy more American farm products, while the president canceled a planned tariff increase that was set to take place in mid-October. The deal could be signed when the president heads to Chile next month for the Asia-Pacific Economic Cooperation forum.
Forecasters have warned the U.S. economy, which is in its 11th year of expansion, could be headed toward a slowdown, especially as the trade war continues.
[Read more: Businesses seeking exceptions to China tariffs say what they really need is certainty]
