The U.S. economy slightly cooled its growth rate during the third quarter, with the gross domestic product (GDP) falling to 3.4 percent in a third reading on Friday, in line with analyst expectations.
That fell from the first reading of 3.5 percent, according to the Commerce Department. It remains in line with the Trump administration’s goal of achieving a 3 percent growth rate in each quarter, but declined from the second quarter growth rate of 4.2 percent.
The deceleration of GDP growth is primarily attributed to a downturn in exports and in nonresidential fixed investments. Exports likely have fallen because of a nearly year-long trade war between the U.S. and China that’s culminated in billions of dollars in tariffs.
Growth is still largely being driven by President Trump’s $1.5 trillion tax overhaul, which was signed into law last December and significantly slashed the corporate tax rate, bolstering business investment and increasing consumer confidence.
The economy is also expected to cool slightly in the fourth quarter. GDPNow, an up-to-date tracker monitored by the Federal Reserve Bank of Atlanta, is estimating fourth-quarter growth of 2.9 percent. That’s in large part to gradually fading fiscal stimulus and the ramifications of the trade war.