Second estimate: US economy is running better than expected

The US economy grew slightly faster in the third quarter than previously estimated. Thus, the growth rate has accelerated slightly.

Between July and September, gross domestic product (GDP) rose at an annualized rate of 2.1 percent. This was announced by the Ministry of Commerce on Wednesday.

In a first estimate from the end of October, only a growth of 1.9 percent had been determined. Analysts had expected on average a confirmation of the first survey. The second estimate shows that the pace of growth continues: In the second quarter, the US economy grew an annualized two percent.

In the US, growth figures are extrapolated to the year. They indicate how strongly the economy would grow if the pace of growth continued for a year. In Europe, this method is abandoned, which is why growth figures from the two major economic areas are not directly comparable.

Exports and private consumption have risen

Despite the tariff dispute with China sparked by US President Donald Trump, exports rose 0.9 percent in the third quarter. Private consumption, which accounts for two-thirds of GDP, grew by 2.9 per cent. But in the spring, the plus here with 4.6 percent was still significantly higher.

At the same time, companies reduced their investments by 2.7 percent in the summer. In a first estimate, there was still talk of a minus of three percent.

In light of the weak global economy, the US Federal Reserve (Fed) cut the monetary policy key to supply commercial banks with money at the end of October by a quarter to the new range of 1.5 to 1.75 percent. This was preceded by interest rate cuts in September and July. Higher interest rates make loans more expensive and can thus slow down the upswing.

The central bank now signals that it wants to keep quiet for the time being. Despite unresolved trade conflicts, US Federal Reserve Chairman Jerome Powell is optimistic about the domestic economy. "At this point in the long upswing, I see the glass way more than half full," he said recently.