A lower trade deficit than expected and increased defense spending boosted economic growth in the US in the third quarter, although other details of a report on Thursday showed some loss of momentum in the activity.Gross domestic product (GDP) expanded at an annual rate of 3.5 percent in the period, the Commerce Department said. Economists expected a 3.0 percent rate. While the rate of growth of business investment, housing and consumer spending slowed from the second quarter, all those categories contributed to GDP growth.
Despite the slowdown from the robust pace of 4.6 percent in the second quarter was the fourth quarter for a total of five in the economy moves to 3.5 percent or more.The data came a day after the Federal Reserve ended its program of asset purchases.
Federal officials said they had enough underlying strength in the economy.The lower trade deficit reflected a decline in imports, which fell at the fastest rate since the fourth quarter of 2012.
This is largely attributed to a reduction in oil imports. Trade contributed 1.32 percentage points to growth. While there are concerns that a strengthening dollar and a slowdown in the euro zone and China affect US exports, economists believe that the impact will be marginal.
Government spending also given a boost as defense outlays rose to the highest rate since the second quarter of 2009.One of the few growth areas were subtracted inventories, which subtracted 0.57 percentage points to GDP after contributing 1.42 points in the second quarter.
Growth in business investment slowed in the third quarter, when the teams spending increased only 7.2 percent. Economists had expected a second consecutive quarter of double-digit expansion. While consumption growth slowed to 1.8 percent from 2.5 percent in the second quarter, however it contributed 1.22 percentage points to GDP growth.
Consumption accounts for over two-thirds of economic activity in the country.The moderate pace of consumption helped to keep inflation pressures contained during the quarter. The two main indices of inflation from GDP data which included Thursday’s report strongly cooled.
One the defensive side, the US delegation to the United Nations informed the members of the Security Council that would circulate a draft resolution establishing an international sanctions regime for South Sudan, said an official on condition of US anonymity.
Australian Ambassador to the UN, Gary Quinlan, and President of the Security Council this month, refused to comment on possible punitive measures. But he told reporters that country and several other members of the Council supported the idea of introducing an arms embargo from the sanctions regime of South Sudan.The president of South Sudan, Salva Kiir and Riek Machar rebel leader should continue peace talks led by the block of Eastern African region, IGAD, said the US official.Also, the United States attacked targets of the Islamic State on Sunday and Monday, with five air strikes in Syria nine in Iraq, according to US Central Command.Attacks in Syria beaten fighting positions and buildings of Islamist militants, and reached a small group of fighters near the town of Kobani, near the border with Turkey.
Another attack hit Dayr Az Zawr near, said a statement on Monday.In Iraq, the US-led offensive destroyed vehicles and equipment fighters Islamic State, while affecting a small unit of militants and a fighting position.The nine attacks in Iraq were near the cities of Baiji, Fallujah and Rutba, the statement said.