Personal consumption was a factor, up by 2.6% compared with 2.2% in Q2. Also higher were private inventory investment, federal spending, nonresidential fixed investment and exports, according to the Q3 GDP report from the Commerce Department.
These positives were partly offset by a drop in residential fixed investment.
Durable goods were up by 6.1% and nondurable goods increased 1.3%. In Q2, they were up by 6.8% and 1.9%, respectively. Services beat the previous quarter, rising by 2.5% compared with 1.6%.
Stuart Hoffman, chief economist at PNC’s Economics Division, had this to say: “The economy found some more traction in the third quarter as consumer spending firmed up, inventories swelled, investment in equipment continued to advance rapidly and federal government spending remained strong. Global trade was a drag on Q3 GDP as surging imports from China nullified the positive impact of overall export growth.”
Lackluster final sales were the Achilles heel of the U.S. economy, Hoffman added, “indicative of an economy still struggling to make the transition into a self-sustaining recovery.”