This article discussed how the U.S.
economy has grown grew at its fastest pace in two years in the third quarter.
It lists that the main reasons for this was a surge in exports and a rebound in
inventory investment which caused a slowdown in consumer spending.
It was the strongest growth rate since
the third quarter of 2014. GDP ended up increasing at a 2.9 percent annual
rate. Luke Bartholomew, who is a fixed income investment manager at Aberdeen
Asset Management in London, believes that “…the U.S. is roughly on track. It's
a natural bounce back following a pretty underwhelming year so far".
The article also discussed the surge
in soybean exports that helped to shrink the trade deficit in the third quarter
as exports increased at a 10 percent rate.
Some other factors to the newfound
economic growth discussed were that business inventories went up causing a 0.61
percentage point to GDP growth and spending on nonresidential structures increased
at a 5.4 percent rate in the third quarter.
It is interesting to see how the surge in export caused the decrease in consumer spending.Also,I think the increase in GDP shows positive sign of future continuous growth for the US economy.
ReplyDeleteThis example seems like it could be applied to the Keynesian cross, referencing how planned expenditure was greater than actual expenditure. The point here about GDP growth, I think is mostly due to changes in saving and investment, because without this equilibrating factor GDP would be more likely to fall in result of unsold inventories.
ReplyDeleteIt's interesting that the surge in exports and rebound in investment slowed consumer spending because at the end of the second quarter, consumer consumption was the largest contributor to the growth of the economy.
ReplyDelete