While the Federal Reserve lowered interest rates later in the day, to keep a slowdown from turning into a slide, several analysts emphasized that the economy remained rooted in solid ground. “If I saw cracks in the consumer sector, I would be worried, but I don’t see that yet,” said Ben Herzon, executive director of United States economics at Macroeconomic Advisers, a forecasting firm. “The economy is not slowing into a recession.”
Consumer spending accounts for the largest chunk of G.D.P. by far, and while its growth fell to a 2.9 percent annual rate from the 4.6 percent showing in the second quarter, it remained solid. Residential investment rose at a strong 5.1 percent annual rate after months of declines. Exports rose as well, but not as much as imports, a net loss.
Business investment, which includes research and development, buildings and equipment, was disappointing, though, with a 3 percent drop. Spending on factories and offices sank by a whopping 15.3 percent.
Third-quarter growth suffered a bit from a six-week strike at General Motors that halted production. Troubles at Boeing, the nation’s largest aerospace manufacturer and its largest manufacturing exporter, have also nibbled away at output. The company’s 737 Max has been grounded after two calamitous crashes, and deliveries of planes coming off the assembly line have largely halted.
Mr. Herzon sees those as temporary developments. And businesses that have stepped back from building inventories, he argued, will reverse course soon.
Article source: https://www.nytimes.com/2019/10/30/business/economy/us-gdp-growth.html?emc=rss&partner=rss
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