The US economy grew at its fastest pace in two years in the third quarter as a surge in soybean exports and a rebound in inventory investment offset a slowdown in consumer spending.
GDP increased by 2.9 percent year-on-year after rising at a 1.4 percent pace in the second quarter, the US Department of Commerce said on Friday.
That growth rate was the strongest since the third quarter of 2014 and beat economists’ expectations of a 2.5 percent expansion pace. Business investment improved the quarter, although spending on equipment remained weak.
However, with exports and inventories accounting for almost half of the increase in output, economists warned the growth spurt would likely be temporary.
Still, the data helped dispel any lingering fears the economy was at risk of stalling. In the first half, growth averaged only 1.1 percent.
“While the economy may not be ready to take off, today’s GDP suggests the economic expansion is not at risk of ending,” said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management in Baltimore.
Coming ahead of a US Federal Reserve policy meeting next week, economists said the data was unlikely to change views that the US central bank would wait until December, after the Nov. 8 presidential election, to raise interest rates.
The US labor market is near full employment and price pressures have been increasing steadily, raising confidence that inflation will gradually move toward the Fed’s 2 percent target.
Consumer spending, which accounts for more than two-thirds of US economic activity, supported the economy in the third quarter by increasing at a 2.1 percent rate, but was down from the second quarter’s robust 4.3 percent pace.
With a tightening labor market generating steady increases in wages, spending could accelerate in the fourth quarter.
Data on Friday from the US Department of Labor showed worker compensation rose 0.6 percent in the third quarter after a similar gain in the second quarter, leaving the year-on-year gain at 2.3 percent.
However, a third report showed consumer sentiment fell this month.
Less than two weeks before the election, the GDP report was seen as bolstering Democratic US presidential candidate Hillary Rodham Clinton, who has positioned herself as the best candidate to continue the more than six years of growth under US President Barack Obama.
“This is good news for the Clinton campaign, which has tied itself closely to the Obama administration’s record on the economy,” Boston College economics professor Robert Murphy said.
Clinton’s campaign team welcomed the growth pick-up and warned that policies proposed by Republican US presidential candidate Donald Trump “would take us backwards.”
Trump’s campaign team described the growth numbers as “dismal” and said they underscored the need for change.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”