White House Economic Adviser Kevin Hassett says he believes the U.S. can sustain healthy economic growth.
He told CNBC on Monday that he expects economic growth to slow again in the fourth quarter but still finish the year over 3 percent.
"There was a big inventory build in the third quarter, so it makes me think it's closer to 3 [percent] than to 4 [percent] in the fourth quarter," Hassett told CNBC.
"I think you lose about a half a percent," he said.
The U.S. economy grew at a robust annual rate of 3.5 percent in the July-September quarter as the strongest burst of consumer spending in nearly four years helped offset a sharp drag from trade, the Associated Press reported.
The Commerce Department said Friday that the third quarter's gross domestic product, the country's total output of goods and services, followed an even stronger 4.2 percent rate of growth in the second quarter. The two quarters marked the strongest consecutive quarters of growth since 2014.
The result was slightly higher than many economists had been projecting. It was certain to be cited by President Donald Trump as evidence his economic policies are working. But some private economists worry that the recent stock market declines could be a warning signal of a coming slowdown.
The GDP report along with next week's unemployment report for October are the last major looks at the economy before voters go to the polls in the mid-term elections.
For this year, economists are projecting the momentum built up should result in growth of 3 percent, the best annual showing in 13 years. But they believe the impact of Trump's trade war with China and rising interest rates will slow growth in 2019 to around 2.4 percent, with a further decline to under 2 percent in 2020.
"I think we will see a significant slowdown, in part because economic growth has been raised to an artificially high level by the tax cuts," said Sung Won Sohn, chief economist at SS Economics in Los Angeles.
© 2023 Thomson/Reuters. All rights reserved.