Consumer spending rises steadily and fewer Americans seek unemployment benefits
27 November 2019 - 19:21Washington — US economic growth picked up slightly in the third quarter, rather than slowing as initially reported, and there are signs the downturn in business investment could be drawing to a close.
The improvement in the economic data further diminished the risks of recession in the near term. Federal Reserve chair Jerome Powell struck an optimistic note on the economy on Monday saying “at this point in the long expansion, I see the glass as much more than half full”. When measured from the income side, the economy grew at a 2.4% rate in the last quarter. Gross domestic income increased at a rate of 0.9% in the second quarter. The income side of the growth ledger accelerated despite a drop in profits.
The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at a 2.3% rate in the July-September period, quickening from a 1.4% growth pace in the second quarter.The Fed’s preferred inflation measure, the core personal consumption expenditures price index excluding food and energy, increased 1.6% in the 12 months through October. The so-called core PCE price index rose 1.7% in September.
A second report from the commerce department on Wednesday showed orders for nondefence capital goods excluding aircraft, a closely watched proxy for business spending plans, surged 1.2% in October, the largest gain since January, after falling 0.5% in September. These so-called core capital goods orders were boosted by increased demand for machinery, computers and electronic products and fabricated metals.
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