A report released by the Commerce Department on Wednesday showed U.S. economic growth unexpectedly slowed in the third quarter.
The Commerce Department said gross domestic product shot up by 2.8 percent in the third quarter after surging by 3.0 percent in the second quarter. Economists had expected another 3.0 percent jump.
The unexpected slowdown in the pace of GDP growth primarily reflected a downturn in private inventory investment and a larger decrease in residential fixed investment.
Meanwhile, these movements were partly offset by accelerations in exports, consumer spending and federal government spending, the Commerce Department said.
The increase by GDP in the third quarter primarily reflected a 3.7 percent spike by consumer spending along with increases by exports and federal government spending.
The economy keeps growing, even though the base of growth is narrower as consumers provide the lions share of the expansion, said Nationwide Financial Markets Economist Oren Klachkin.
He added, The economy cannot sustain this expansion indefinitely so we think growth will cool even as interest rate and inflation pressures come down.
On the inflation front, the Commerce Department said the pace of consumer price growth slowed to 1.5 percent in the third quarter from 2.5 percent in the second quarter.
Excluding food and energy prices, core consumer price growth also slowed to 2.2 percent in the third quarter from 2.8 percent in the second quarter.