in turn provides an offset in the form of higher demand for u. s. exports. indeed, the most recent data suggest that the u. s. economy has regained some vigor in the second half of this year. according to the bureau of economic analysis, real gdp expanded at an annual rate of 3. 7 percent in the third quarter, and final sales grew at the fastest pace in a year. in particular, real consumer spending rebounded, as households responded to the aggressive incentives offered by motor vehicle companies by sharply increasing their purchases of new cars and trucks. in addition, low mortgage rates have helped sustain a high level of demand for new homes, and business investment in equipment and software posted another robust gain, led by a sharp increase in spending on non - high - tech equipment. available indicators for the fourth quarter seem a little more mixed, but the general consensus of economic forecasters is that real gdp will expand in the fourth quarter at a pace similar to that in the third quarter. although real incomes continue to be squeezed by significantly higher energy prices, recent spending indicators, including last friday ’ s retail sales report, suggest that consumption was well maintained in october. in addition, housing construction and home sales have been maintained at a robust pace in recent months, and recent declines in mortgage rates should continue to support demand. business demand for high - tech equipment seems to have softened a little in recent months, judging both from the data on new orders and from industry commentary. however, business investment on non - high - tech equipment should be buoyed by strong fundamentals, including low interest rates and strong corporate balance sheets, as well as by the partial - expensing provisions of the current tax code, which encourage businesses to accelerate investment spending on longer - lived equipment to take advantage of the temporary tax incentive before it expires at the end of the year. presumably reflecting these factors, bookings for non - high - tech capital goods have been on a steep uptrend in recent months. the latest reading on the labor market, which has been a source of uncertainty for some time, was particularly encouraging. after slowing this summer, employment on private nonfarm payrolls rose nearly 300, 000 in october, about the same as the robust pace reported during the spring of this year. october ’ s increase was boosted somewhat by a sizable increase in construction employment, which was partly related to rebuilding and cleanup activity following this summer ’ s hurricanes. but even so, the pace of hiring

bank holding company. this period begins four years after the signing of the riegle - neal interstate banking and branching efficiency act of 1994, which removed many restrictions on interstate banking. - 5profitability. we find that small banks that were acquired by another institution were, on average, about the same size and geographic scope as other small banks but they were less profitable. this fact challenges the notion held by some that small scale or operating in a very limited geographic area is a disadvantage and it shows that many small, locally focused banks are performing well in a changing and challenging marketplace. bank regulators should understand how the evolving structure of community banking has affected customers and how regulations can be tailored to limit the extent to which consolidation is driven by unnecessary, ineffective, or excessive regulatory burden. unfortunately, current research does not provide enough evidence to conclusively answer these questions. earlier research has shown that technological change and the removal of regulatory restrictions on interstate banking in the 1980s and 1990s have played important roles in driving consolidation. 4 we can gain more insight into the factors that underlie changes in community banking by asking community bankers. my former colleagues at the conference of state bank supervisors ( csbs ) have done that in their community bank survey and the companion “ five questions for five bankers ” interviews. 5 results of the 2019 survey will be revealed during the next session, but i don ’ t think i am giving too much away to share that the factors mentioned as driving consolidation this year remain consistent with previous results. the 2018 survey shows that among banks indicating that they had received and seriously considered accepting an acquisition offer from another institution during the previous 12 months, a large majority see berger, demsetz, and strahan ( 1999 ) and focarelli, panetta, and salleo ( 2002 ). a video on the results of the csbs 2018 survey of community banks is available on this conference ’ s website at https : / / www. communitybanking. org / news ; for more information on the survey, see the csbs website at https : / / www. csbs. org. - 6say the cost of regulations or the lack of economies of scale at their current size are “ important ” or “ very important ” in their decision to consider the offer. about half mention succession issues. the survey did not ask which factor bankers consider most important, and there are many possible reasons a bank would consider selling. but it should not be surprising that the cost of regulation is cited