U.S. Federal Reserve Says Economy Is Growing At A ‘Moderate’ Pace; GDP Expanded At An Annualized Rate Of 1.5 Percent In Q3
The economy of the United States expanded at a 1.5 annual rate during the third quarter of the current year, down from the previous quarter's 3.9 percent, as per the US Commerce Department.
According to a report by The Guardian on Thursday, businesses stockpiling inventory was one of the reasons for the decline of the US economy in the third quarter. However, economists are bullish that the economy will recover in the last quarter of 2015.
"Although the headline number of 1.5 percent growth was a bit weaker than expected, the details were quite good," says PNC chief economist Stuart Hoffman. "Demand from US consumers, businesses and governments remains solid, as does demand for US-produced goods and services, both domestically and from abroad."
Hoffman goes on, "The big drag was from inventories, but that will quickly fade, and growth should pick back up in the fourth quarter."
Meanwhile, the US Federal Reserve announced its plans on Wednesday to keep the rates unchanged, as reported by BBC News on Thursday. It also says "economic activity has been expanding at a moderate pace."
"As far as the Fed is concerned, the next two employment and inflation reports will have a bigger impact on whether the Fed opts to hike interest rates in December or waits until early next year," Capital Economics chief economist Paul Ashworth writes in a dispatch to investors.
"It's a close call but, on balance, we still think the Fed will end up delaying until 2016."
On the other hand, a chief investment strategist says the strength of personal consumption is a good sign for the continuing expansion in the US economy.
"The good news is that the important engine of personal consumption remains strong," says Scott Clemons, as noted by The New York Times on the same day.
"The headline data was slightly disappointing, but the persistent strength of personal consumption bodes well for a continued modest expansion in the US economy."
