The US authorities always cite their quarterly growth figures on an annualised basis. The first reading of the Q3 growth figure for 2018 has been published by the US Commerce Department and came in at 3.5%. The figure will be subject to two revisions as more comprehensive data becomes available.
The figure is mixed in that it comes in above many analysts’ predictions of 3.3% growth, but is significantly lower than the Q2 number of 4.2%. Traditionally, that would suggest that the US economy is slowing, of course, but one can’t read too much into the figure because of the influence of Trump’s trade war (most notably with China) which begins to bite. The impending trade conflict undoubtedly boosted the Q2 figure as exports surged to beat the effect of higher raw materials costs affected by the imposition of tariffs. The Q3 figure was subdued because export volumes declined; Q2 exports saw a 13.5% increase, but fell back by 7.5% in the latest quarter. Some US firms source “cheap” steel and aluminium (for example) from China and then manufacture products in the US for export to markets around the world and domestically. The imposition of tariffs on the Chinese (or other nation) raw materials pushes up the price (or reduces the profit margin) of the final US products, of course.
It is anticipated that full-year growth for the US economy will come in at 3% - should that be achieved, it would be the best full-year rate in more than a decade.
The dominant term in the US economy is domestic consumption. Consumer spending was up from 3.8% in Q2 to 4% in Q3. On the less positive front business investment increased by under 1% and expenditure on housing saw a 4% decline (figures are on an annualised basis).