Pennsylvania Trust

GDP – Showing Resilience

GDP – Showing Resilience

Today’s first reading showed that gross domestic product expanded at a better-than-expected 1.9% annualized rate in the third quarter. The gain mainly reflected strength in consumer spending, the biggest part of the economy, which increased at a 2.9% rate and exceeded projections for a 2.6% rise.


  • U.S. real GDP increased by 1.9% q/q annualized in Q3 (BCM: 1.8%, consensus: 1.6%), slightly below its 2% increase in Q2, lowering its y/y change to 2.0% from 2.3%. Domestic demand moderated, with real final sales to domestic purchasers increasing by 2% q/q annualized in Q3, compared to the robust 3.6% q/q increase in Q2.  The deceleration in U.S. economic growth this year reflects tariffs and trade-related uncertainties, slower global growth, the fading boost from the Tax Cuts and Jobs Act, and geopolitical risks.
  • Healthy growth in real consumption (+2.9% q/q annualized), the first increase in residential fixed investment since Q4 2017 and solid growth in government purchases more than offset declines in business fixed investment (-3% q/q annualized), the widening trade deficit (-0.1pp), and inventory investment (-0.1pp) that subtracted from growth.


Disclosure: This Commentary represents a review of topics of possible interest to Pennsylvania Trust’s clients and is not personalized investment advice. It contains Pennsylvania Trust’s opinions, which may change following the date of publication. Information obtained from third-party sources is assumed to be reliable but is not guaranteed. No outcome – including performance – is guaranteed, due to various uncertainties and risks. This document is not a recommendation of any particular investment. Investment decisions for clients are made on an individualized basis and may be different from what is expressed here. Past performance is no guarantee of future results.