The US economy fell short of expectations in the third quarter of this year, weighing on inflation-weary voters less than a week before the presidential election.
Gross domestic product (GDP), a measure of all goods and services produced in the three months between July and September, grew at an annual rate of 2.8 percent.
That’s down from 3 percent in the second quarter, according to data released Wednesday by the Commerce Department.
Economists consulted by Dow Jones had expected an increase of 3.1 percent.
Despite spending more, US consumers are gloomy about their jobs and financial prospects, with Democratic Vice President Kamala Harris still trailing Republican Donald Trump in polls on the economy.
The US economy fell short of expectations in the third quarter of this year, weighing on inflation-weary voters less than a week before the presidential election
“If you were to look at numbers like GDP growth, income or consumption, or even employment, you’d say, ‘Gosh, this economy is in pretty good shape,’” said Dan North, senior economist at Allianz Trade North America.
“The one thing that completely destroys this story is the inflation that consumers have had to deal with,” he told AFP.
Although GDP growth fell short of expectations for the quarter, U.S. growth this year will surpass other advanced economies such as Germany, France and the United Kingdom, according to recent estimates from the International Monetary Fund.
Bret Kenwell, US Investment Analyst at eToro, said that with the Federal Reserve in a rate cutting cycle, every major economic report is now being scrutinized to determine when and by how much the Fed will cut rates.
The central bank cut interest rates in September for the first time since 2020, pushing borrowing costs down from their highest levels in decades.
He said that while the GDP report fell short of economists’ expectations, this report was small and reaffirms that the U.S. economy remains on solid footing.
“Solid but not blistering growth fits nicely within the current economic context,” he said in a statement.
“Too sharp a print and investors would likely question the Fed’s decision to cut rates by 50 basis points in September, while a weak GDP print could reignite concerns about a deteriorating economy.”
The Commerce Department said the GDP figure “reflects an increase in consumer spending, exports and federal government spending.”
A New York Times and Siena College poll of likely voters released last week found that economic issues remained top of mind about two weeks before the election.
Respondents were slightly more likely to trust Trump to do better on the economy, with 52 percent of respondents favoring him over the 45 percent support for Harris.