Can U.S. econ­omy stay hot?

The Oklahoman (Sunday) - - EXTRA -

The U.S. econ­omy is run­ning hot. Growth clocked in at an an­nual pace of 3.5 per­cent in July-Septem­ber, atop a 4.2 per­cent April-June ex­pan­sion. To­gether the two pe­ri­ods mark the fastest con­sec­u­tive quar­ters of growth since

2014. Credit con­sumers: Their spend­ing ac­counted for 77 per­cent of third-quar­ter growth. Their con­fi­dence is the high­est in 18 years.

But econ­o­mists see yel­low lights ahead. Growth has fed off tax cuts signed last De­cem­ber. But the deficit-fi­nanced stim­u­lus likely will start to burn out next year. Mean­time, the Fed­eral Re­serve has hiked in­ter­est rates three times this year and is ex­pected raise them again in De­cem­ber. Grad­u­ally, higher rates should weigh on the econ­omy. In­deed, Pres­i­dent Don­ald Trump is al­ready com­plain­ing about them. Trump’s trade poli­cies — im­port taxes on U.S. trad­ing part­ners that have drawn re­tal­i­a­tion on Amer­i­can ex­ports — also are caus­ing some busi­nesses to de­lay in­vest­ments. The trade hos­til­i­ties and higher bor­row­ing costs con­trib­uted to a tum­bling stock mar­ket in Oc­to­ber and to slug­gish 0.8 per­cent third-quar­ter growth in busi­ness in­vest­ment, re­vers­ing strong growth the first half of 2018.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.