U.S. economy grew at annual rate of 3.5% in third quarter

The U.S. economy grew at a strong 3.5 percent annual growth rate in the third quarter, buttressing Republican claims that President Donald Trump is presiding over a boom, with just 11 days remaining before congressional elections.

Growth dipped from the second quarter’s 4.2 percent rate, but the economy still posted its best back-to-back quarters in four years — thanks to free spending by consumers and the federal government — and is within reach of the Trump administration’s 3 percent annual growth target.

“Despite all the hand-wringing about the [stock] market, the economy is looking pretty good,” said Ethan Harris, head of global economics for Bank of America Merrill Lynch. “The story here is a double dose of caffeine from tax cuts and spending increases.”

Vice President Mike Pence on Friday touted the 3.5 percent growth, writing on Twitter that, under Trump, “the American economy is making a REAL COMEBACK after nearly a decade of slow growth.”

The strong headline growth number capped a volatile week on Wall Street, where the Dow Jones industrial average surrendered all its gains for the year. The Commerce Department report Friday also offered a mixed verdict on prospects for the president to deliver an enduring era of improved economic performance and suggested that rising interest rates are beginning to bite.

“The details for growth were not as impressive as the 3.5% headline,” Jim O’Sullivan, chief U.S. economist for High Frequency Economics, said in an email.

The administration advertised last year’s corporate tax cut as a spur to business spending on new machines, computers and factories. Yet the evident gains earlier this year seem to be fading, the report showed.