Page 25 - ARUBA TODAY

BUSINESS Thursday 28 November 2019
A25

U.S. economy looking durable despite risks from trade conflict

By MARTIN CRUTSINGER been because consumers,
WASHINGTON (AP) — A se- who drive about 70 per-
ries of government reports cent of the economy, are
Wednesday cast a picture signaling that they will likely
of a steadily growing U.S. keep spending through the
economy, fueled by solid holiday shopping season
consumer spending and and into next year. That
defying threats — at least spending is being support-
for now — from a U.S.-Chi- ed by rising incomes and
na trade war and a global an unemployment rate
slowdown. that is near the lowest levels
The Commerce Depart- in a half century.
ment estimated that the Consumer spending
economy grew at a mod- gained some momentum
erate 2.1% annual rate over entering the final three
the summer, slightly bet- months of the year, with
ter than it had previously spending rising by a 0.3%
estimated. Other reports annual rate in October,
showed stronger consumer the fastest monthly pace in
spending and a rebound in three months.
orders for big-ticket manu- And in the U.S. manufactur-
factured goods. ing sector, which has been
For the July-September struggling with global eco- In this Oct. 19, 2019, file photo Eldon Sylvester harvest soybeans in his field near Wamego, Kan.
quarter, the rise in the gross nomic weakness and dam- Associated Press
domestic product, the age from the Trump admin-
economy's total output of istration's trade conflicts, to slow a little further over rates. deregulation and America-
goods and services, ex- orders for high-cost items the coming months, but For the full year, econo- first trade policies.
ceeded the government's rebounded in October by a the latest data suggest that mists think GDP will expand As recently as several
initial estimate a month 0.6% annual rate after hav- the slowdown in the fourth 2.3%, down sharply from a months ago, as U.S.-China
ago of a 1.9% annual rate. ing declined in September. quarter won't be quite as 2.9% GDP gain in 2018. Last trade tensions were esca-
A key reason is that busi- Economists said the flurry of bad as we had previously year's increase had been lating, global growth was
nesses didn't cut back on reports depict an economy feared," analysts at Capital fueled by the $1.5 trillion slowing and financial mar-
investment spending as that is regaining its foot- Economics said in a note tax cut that President Don- kets were suffering losses,
much as first estimated. ing after absorbing threats Wednesday. ald Trump pushed through many analysts worried that
The economy had begun this year, from the global The GDP report showed Congress and billions in ad- the economy might be on
the year with a sizzling 3.1% slowdown to the intensify- that business investment ditional spending for the the verge of recession.
GDP rate, fueled largely ing trade war with China, fell at a 2.7% annual rate in military and domestic pro- But the Federal Reserve,
by the now-faded effects which has perpetuated un- the July-September period, grams. which had raised rates four
of tax cuts and increased certainties for businesses. the second consecutive For 2020 as a whole, many times in 2018, began cut-
government spending. Many companies have sus- decline. Yet that drop was economists envision growth ting rates in July, giving a
Many analysts worry that pended plans to expand offset by a solid 2.9% gain in of around 2%. That would boost to interest-rate sensi-
GDP growth is slipping in and invest. consumer spending. be roughly the annual av- tive sectors of the econo-
the current October-De- Still, the stock market has set Residential investment erage that has prevailed my. This month, after its third
cember quarter to a 1.4% record highs on optimism did rebound to an annual since the Great Recession rate cut of the year, the Fed
annual rate or less as busi- that at least a preliminary growth rate of 5.1% after six ended in 2009. But it is well signaled that it would likely
ness investment weakens U.S.-China trade agree- consecutive quarters of fall- below the 3%-plus eco- keep rates unchanged in
further. But most say the ment can be reached ing home investment. Ana- nomic growth rates that coming months unless it
slowdown won't likely be soon. lysts attribute that rebound Trump pledged to achieve saw signs of significant eco-
as severe as it might have "We still expect GDP growth in part to falling mortgage with his program of tax cuts, nomic weakness.q