The U.S. economy grew at an annual rate of 2.9% from July to September, the fastest growth in two years. In addition to overall growth, trade also increased during this quarter. Overall, exports grew by 10%, the best increase in three years, largely due to the expansion of shipments of soybeans to China. This increase in exports has contributed to 200% overall growth of exports to China in the last decade. Although the economy experienced the fastest growth in two years, businesses inventories grew. However, the large amount of unsold items did not harm the growth of the economy. In addition, consumer confidence hit a nine-year high in September, with their spending being another large factor that contributed to the growth. The solid growth increase is helping the Fed in their plan to raise interest rates in December.
This subject has been a very popular topic in the current election. Both candidates have mentioned and promised to increase the amount of economic growth, specifically Trump promised if he is elected president to have a growth rate of 4%. This 2.9% growth rate was the last reported number before voting for the election began. It will be interesting to see how the outcome of the next election will affect the growth rate of the economy.
http://money.cnn.com/2016/10/28/news/economy/us-economic-growth-gdp-third-quarter/
I am curious to see if any of the candidate can indeed increase economic growth since this year's election is an interesting one. I am also wondering what will happen to the unsold inventories and considering how large it is, it might start to affect the economy in the long run because those inventory will need to be sold eventually if growth is to be seen.
ReplyDeleteIs the growth displayed only impacted by the excess trade of soy beans only? And how will the government address inventory? It's effect has not taken shape yet, but in the long run it will not leave the economy undisturbed.
ReplyDeleteThe GDP report was one of the last major economic reports the government will issue before voters go to the polls on Nov. 8. Republican presidential candidate Donald Trump has cited very weak GDP growth rates as evidence that Democratic economic policies have not worked. While the pace of economic growth in the third quarter fell well short of previous achievements, the latest data represented a significant improvement from the first half of 2016 and the best quarterly advance in two years. Economists also said the gains were probably strong enough to reassure Federal Reserve policy makers that it was safe to raise the benchmark interest rate when they meet in December. The election campaign has probably created a degree of uncertainty that has impacted growth. But underneath all of that, the labor market is still doing well and inflation is creeping up.
ReplyDeleteI wonder which candidates policy would increase growth in our economy. Trumps plan says he will increase growth up to 4% but the candidates have not really focused on changing the economy and more on bashing one another.
ReplyDeleteI am from Greece where politicians give away numbers before elections but never come close to them. I have small trust when too many promises are being made.The tactics a politician will follow to reach a curtain goal are more important than the numbers promised
ReplyDeleteYes, the candidates are most focused on over-powering one another, and make unrealistic policies that will not be implemented in the future. Even though this article mentions that the economy is growing, it is interesting to see the impact of unsold inventories on the future of the economy. If inventories are high, it indicates that the planned expenditure is less than the output, and total output might fall in the future.
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