The economic output of the United States grew by 3.1 percent in 2017’s second quarter vs an expected three percent rise. The US economy remains stable at its core, as the booming stock market and the steady job growth encouraged consumers to spend more.
Even if hurricanes Irma and Harvey temporarily curbed economic activity and slowed momentum, at least in some areas, the US GDP growth recorded its quickest pace in more than 2 years during Trump’s young presidency. According to the Commerce Department, US gross domestic product grew at a 3.1% annual rate between April and June of 2017, which makes for an updated revision from the previous 3% growth estimate.
Hurricane Harvey struck Texas hard, creating a decline in industrial production (especially oil refining), retail sales and home-building/sales in August. After hurricane Irma hit Florida earlier in September, we can anticipate further weakness; however, according to some analysts, rebuilding of the affected areas is expected to further boost the US gross domestic product in the 4th quarter of 2017 and 1st/2nd quarters in 2018. The GDP growth rate estimates for the July-September period stand at 2.2%. The good news is that these estimates could not tell the true story, as in the same period, the US recorded a decline in the goods-trade-deficit and an increase in both wholesale inventories and retail.
The labor market stays strong, despite Irma and Harvey’s impact which cut job growth in September. President Trump proposed his new tax plan on Wednesday, which makes for the largest US tax overhaul since the Reagan era, especially due to the reduction of the corporate income tax to 20% from the actual 35% and the implementation of a new 25% tax rate for businesses such as partnerships, which would boost US economic growth even further.