The U.S. economy grew at an annual rate of 3.5 percent during the July-September quarter, according to The Wall Street Journal. This followed the second quarter's 4.2 percent growth rate.
Although this appears to be evidence that growth has picked up, the stock market has been sending different signals as stocks fell Oct. 26, with the Dow Jones Industrial Average shedding 1.19 percent and the Standard & Poor's 500-stock index dropping 1.73 percent. Additionally, business investment was weak, growing at a modest 0.8 percent annual rate. Although business-investment data can be volatile from one quarter to another, the weak number in the latest report suggests other factors—including uncertainty about the outlook for trade tariffs—could be affecting business decisions to spend on new equipment and plants.
Third-quarter growth likely was a result of a low unemployment rate, solid consumer spending and government spending. However, analysts believe the expansion will slow during the months ahead. The Federal Reserve predicts a growth rate of 2.5 percent in 2019, 2 percent in 2020 and 1.8 percent in 2021.
