The annualized rate of gains in gross domestic product compared with the 3.3% median estimate in a Bloomberg survey and followed a 4.2% advance in the prior three months, according to the October 26 report from the Commerce Department.
In addition, at an global seminar on China's macroeconomic performance jointly organized by the three organizers, 56 percent of 110 domestic economists forecasted China's economic growth will be between 6.5 percent and 6.6 percent; almost half of the economists said the private investment growth will be from 8 percent to 9.9 percent and more than 66 percent of the economists predicted the exchange rate of the yuan to the USA dollar between at 6.85 to 7.412.
Private analysts had estimated a 3.4 percent growth rate in gross domestic product for the third quarter. That was up from a rate of 3.8% recorded in the previous quarter.
Yet the government is also locked in a bitter trade war with China as well as trade disputes with other trade partners and the last quarter's slowdown mostly reflected the impact of Beijing's retaliatory tariffs on U.S. exports, including soybeans.
But lower exports weighed on growth, after a surge earlier in the year as firms rushed shipments to beat tariffs.
The GDP report Friday was the government's first of three reviews of overall economic activity for the July-September period.
"The big swings in trade and inventories between the second and third quarters are likely at least partially due to changes in activity associated with trade policy", said Daniel Silver, an economist at JPMorgan in NY. The core PCE price index rose at a 1.6% annual rate, down from a 2.1% rate in the second quarter. Companies outside the United States stockpiled on goods ahead of the implementation of tariffs, providing a more than one-percentage-point boost to GDP in Q2.
The report said the inflation will remain under control this year and next.
But some of the imports likely ended up in warehouses, adding to the stockpile of inventory, which adds to GDP.
Other decreases existed for exports of nonautomotive capital goods and petroleum.
"Growth downshifted a bit in Q3 and we look for some further slowing in the quarters ahead".
Excluding the effects of trade and inventories, GDP grew at a 3.1% rate in the third quarter compared to a 4% pace in April-June. The growth came in above the Wall Street expectation of 3.3 percent. Borrowing costs also may keep rising, as investors project the Federal Reserve will raise the benchmark interest rate for a fourth time this year in December.
In addition, real consumer spending grew four per cent at an annual rate in the third quarter, substantially up from the 2.6 per cent pace during the preceding four quarters, it said.
"We expect stronger growth in the first half of 2019 to give way to a gradual softening in the second half of the year as government spending, corporate profits and disposable income begins to decelerate as the benefits of the fiscal stimulus measures fade", said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.
USA consumption is being supported in part by a tightening labour market, characterised by an unemployment rate that is at a near 49-year low of 3.7%.
Yet amid President Donald Trump's trade war, nonresidential business investment rose at a 0.8 percent pace, the weakest since 2016 and down from 8.7 percent in the prior quarter.