The Economic Growth Registered by the U.S. Economy in the Third Quarter

On Wednesday a report was released by the Government of the United States attesting that the country registered a stronger than expected economic growth in the third quarter as the consumers and the companies spent more.
But when it comes to the profits registered by the corporates, they were not that high as insurers gained a lot from the two hurricanes: Katrina and Rita.

The commerce department also attested that the U.S. gross domestic product grew with 4.3 percent in the months July to September. As shown in the report, the profits after tax dropped 3.7 percent in the third quarter. This is a very big decline suffered in the last four years, considering that the rise in the second quarter was of 5.3 percent. This means that the profits were reduced by 151.2 billion dollars at the annual rate.

The inflation was lower than it was first predicted; the price index for consumer spending raised at 3.6 percent annual rate, after it was first considered that it would reach 3.7 percent.

As it was mentioned before, the economic growth was due to the consumers who spent more, up to 4.2 percent, originally predicted at 3.9 percent. The spending on housing was also stronger, the investments made by the residential grew at 8.4 percent, from the predicted 4.8 percent, but it was certainly less than the percent growth registered in the second quarter, of 10.8 percent.

The companies also spent a lot, as the investments for the non-residential grew by 8.8 percent from the predicted 6.2 percent growth. The investments that the companies had done to purchase equipment and software reached a growth of 10.8 percent rate, a little bit under the level of the second quarter, when it was of 10.9 percent.

As a conclusion of the report released Wednesday, the U.S. economy is still a strong one, dominated by a strong consumer and company spending, having the inflation under control and having a base for the economic growth that is expected for the year 2006.