WASHINGTON – The US economy maintained a solid pace of growth in the third quarter as ebbing inflation and strong wage gains powered consumer spending ahead of a contentious presidential election set to turn on pocketbook issues.
Gross domestic product increased at a 2.8 per cent annualised rate in the last quarter, the Commerce Department’s Bureau of Economic Analysis said in its advance estimate of third-quarter GDP on Oct 30. Economists polled by Reuters had forecast GDP advancing at a 3 per cent pace.
Estimates ranged from a 2 per cent pace to a 3.5 per cent rate. The economy grew at a 3 per cent pace in the second quarter. The pace of growth was well above what Federal Reserve officials regard as the non-inflationary growth rate of around 1.8 per cent.
The advance GDP estimate was published less than a week before Americans head to the polls on Nov 5 to choose between Vice-President Kamala Harris, the Democratic Party candidate, and former president Donald Trump.
Polls show the race is a toss-up. Americans, who consistently say the economy is a top election issue, have chafed at high food and housing costs, even as the economy has defied forecasts of a recession and continues to outperform its global peers.
Surveys of voters have consistently given the edge to Trump when asked who would be a better steward of the economy, including in the latest Reuters/IPSOS poll out on Oct 29.
The report added to annual revisions published in September, which indicated that the economy was much stronger than had been previously estimated. The revisions almost erased the gap between GDP and gross domestic income (GDI), an alternative measure of growth, through the second quarter.
Prior to the revision, some economists had argued that gap suggested economic activity was being
