The U.S. economy grew faster than expected in the third quarter as a further contraction in business investment was offset by resilient consumer spending.
The Commerce Department reported Wednesday that the July-September performance for the gross domestic product, the economy’s total output of goods and services, was slightly below the 2 percent rate of growth in the second quarter.
Economists had expected the Q3 economic growth to be at 1.6 percent.
Businesses maintained a steady pace of inventory accumulation and the housing market rebounded after contracting for six straight quarters, the government said in its advance estimate of GDP.
Consumer spending, which accounts for 70 percent of economic activity, grew at a solid 2.9 percent rate in the third quarter, but it was still a slowdown after a 4.6 percent surge in the second quarter.
Healthy Consumer Spending
Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, slowed to a still-healthy 2.9 percent rate last quarter after surging at a 4.6 percent pace in the second quarter, the fastest since the fourth quarter of 2017.
Consumer spending is being powered by the lowest unemployment rate in nearly 50 years.
Consumer confidence has been trending lower and wage growth is slowing. Income at the disposal of households rose at a 4.5 percent rate in the third quarter compared to a 4.8 percent pace in the prior period.
Concerns about the health of the consumer were highlighted by a separate report on Wednesday showing private payrolls increased by 125,000 jobs in October after rising 93,000 in September.
Reuters and The Associated Press contributed to this report.