The U.S. economy grew at a 1.9% annualized pace in the third quarter, the Commerce Department said on Wednesday — higher than the 1.6% economists expected.
Why it matters: The economy is still growing at a moderate clip, though the number marks a significant slowdown in growth from just the beginning of this year — when GDP jumped 3.1% — as the boost from President Trump's tax cuts fades and the U.S.-China trade war weighs on growth.
Between the lines: The U.S. consumer has been the saving grace of the U.S. economy in recent quarters as cautious businesses hold off on spending.
- The report shows this trend is continuing, though the strength of the U.S. shopper faltered. Consumer spending grew at 2.9% annual rate in Q3, a slowdown from the 4.6% rate in Q2.
- Meanwhile, business spending weighed on growth, as investments in things like buildings, equipment and software fell 3%.
The bottom line: Q3's GDP report shows a slowing but still healthy economy — bucking fears of an imminent recession for now.
- Still, it’s the second-worst GDP read of the Trump presidency, and growth has tapered sequentially this year.
- A further slowdown would mean one less economic indicator the president can lean on as the 2020 election gets underway.
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