The U.S. economy continued to grow during Q3 2011, but not as fast as many people were predicting, according to the most recent Gross Domestic Product report from the Bureau of Economic Analysis.
The nation’s GDP increased by 1.8 percent during Q3, as several key economic indicators continued to grow. While this is an improvement over the 1.3 percent growth we saw during Q2, it’s slightly lower than previously-estimated growth of 2 percent.
The main causes of GDP growth during Q3 came from increases in non-residential fixed investments, exports, consumer spending, and federal government spending. However, those increases were slightly offset by declines in private inventory investment and state and local government spending.
According to MarketWatch, experts are predicting that our nation’s economy will do better during Q4, but caution that 2012 is still up in the air:
Growth has averaged a paltry 1.2% rate so far this year — much slower a pace than is usually the case in an economic recovery. Growth rates of 3% or more are more common.
Economists are forecasting stronger growth — about 3.0% on an annualized basis — in the fourth quarter ending Dec. 31. Some estimates approach 4%, reflecting expectations of stronger consumer spending.
But economists aren’t very optimistic about growth in 2012 given the continuing European financial crisis, signs of slowing growth in China and, closer to home, fiscal gridlock in Washington.
At the same time, corporate profits increased by $32.5 billion during Q3, which is a huge drop from the $61.2 billion increase we saw during Q2. On the plus side, taxes on corporate income fell by $9.1 billion, resulting in a $41.6 billion increase in after-tax profits.
