US economic growth continues to be robust.<br /><br />The government’s first estimate for the the period from July to September was that GDP expanded at an annual pace of 3.5 percent – better than the 3.0 percent that economists had predicted, but down from the 4.6 percent in the second quarter. <br /><br />Among the factors were a smaller trade deficit as imports slumped – particularly oil – and a surge in defence spending, which rose at its fastest pace since the second quarter of 2009.<br /><br />Business investment, housing and consumer spending were not as strong as in the previous three months, but all held up with job gains helping consumer confidence. <br /><br />Consumer spending, which accounts for more than two-thirds of US economic activity, decelerated to a 1.8 percent pace from the second-quarter’s 2.5 percent.<br /><br />The numbers were released one day after the US central bank, the Federal Reserve, ended its programme of buying bonds each month to pump money into the US economy. <br /><br />Fed officials said they were able to do that because there is sufficient underlying strength in the broader economy.<br /><br />The moderate pace of consumer spending helped keep inflation weak, which is not what the Fed’s policymakers want as they have an annual inflation target of around two percent .<br /><br />However, they did say the likelihood of inflation undershooting that target had diminished since earlier this year.<br /><br />with Reuters
