Expectations were trumped when the US economy grew more than expected in this year’s third quarter signaling signs of an economic resurgence underway in the world’s largest economy.
The US economy grew at a highly unexpected annualized rate of 3.5% in the period from July to September according to a report by the U.S Commerce Department. Economists had earlier predicted the growth to be much more sedate following the previous trends where the world’s largest economy performed badly. In the second quarter, the growth rate just stood at a mere 1.4%.
The sudden rise has been labeled as a mini boom by experts as the consumer spending patterns faced northwards registering growth of 3%, far stronger than the initial estimate of 2.1%.
With the uncertainty surrounding the US economy after Trump’s election as the President, these figures came as huge relief for investors and economists, who were until now, following a pessimistic outlook towards growth rates.
The figures given to predict growth in this quarter were firstly 2.9%, which were then revised to 3.2%.
But the annual growth rate for next year predicted by the Federal Reserve still stands at a mere 2% and it will take more than just strong growth in one quarter to instill confidence more stably.
The surprising part here is that President Donald Trump had criticized the slow growth rates during his election campaign and had vowed to bring them more closer to 4%, if he is elected. This quarter marked the first impact of Trump’s win on the economy and it stood out great but the increase in exports of soya beans also contributed to bring the rates up.
Soya Beans might be a one-timer and the real test for Trump would be to carry forward the third quarter growth rate forward and make it stay there, a challenge definitely but Trump’s moves like arranging a meeting with members of the Silicon Valley to discuss matters of bringing back jobs and capital back to the US seems like steps in the right direction.