In the third quarter of 2016 US economy grow 2.9%, the fastest in 2 years. So how is it influencing on the presidential race?
the figures posted by Commerce Department in Friday, US Gross Domestic Product (GDP), the value of all goods and services produced in the third quarter, increase in 2.9%, beat the analysts’ forecasts for 2.6% growth only. The biggest part of the economy, the consumer spending, grow 2.1%, half the pace as in the previous 3-month period. Corporate investment in equipment declined, for the fourth quarter in a straight.
It’s good news for the American economy, after the growth in the first half of the year was sluggish, averaging just above 1%. But while the economy gained momentum in the third quarter, growth this year comes in at 1.7% - still slow compared with historical standards.
“The economy is good but not great” Stephen Stanley, an economist from New York, said to Bloomberg "The economy is going to continue to rise and fall with the consumer, and the best news there is that the underlying fundamentals are strong”. Indeed, the data are in sync with the Fed policy makers that the economy is making slow and steady progress. Solid employment and steady income make it possible for householders to keep play the role of main economy’s main driver of growth.
How the figures influence the political system and the presidential nominees, just a week before the elections? Th Democrats and Hillary Clinton, who suffered from the consequences of the “e-mail scandal” on the last days, can take a little advantage and claim the economy is improving, while Republicans and Donald Trump can say the progress is tepid and no more than that. Trump already released a statement, calling the quarterly growth “modest”, said the economic growth over the past year has been “dismal” and promise an economic growth of 4% if he will be elected.
Another issue that Trump spoke about a lot is the US import/export business with countries like Mexico and China. Trump has threatened to impose tariffs against Mexico and China and tear up free trade deals like NAFTA. But the data just show that the exports of the US grew by 10%, the best pace in nearly 3 years, mainly because a huge jump in shipments of soybeans, when China has been one of the biggest buyers of those beans. Over the past decade, American agricultural exports to China have increased by 200% over the past decade. “It looks like a temporary boost”, said to CNNMoney Bricklin Dwyer, an economist at BNP Paribas, regarding to the issue, “You can’t keep shipping while heaps of soybeans, but it’s certainly not bad news”.
The GDP report comes not only just more than a week before the Americans go to the polls, but also few days before the Fed’s rate-setting committee meets on November 1-2. Investors see a slim chance for a rate move when policy makers gather tomorrow, and a high probability for December, when a solid growth numbers help to clear the way for the fed to raise the interest rate.