As the economy shrugs off hurricanes, the first reading on 3rd quarter US Gross Domestic Product shows a three percent increase vs the 2.5% rise previously expected. As CNBC puts it, the US economy is doing way better than expected, maintaining a snappy pace of growth in 2017’s 3rd quarter.
The US Gross Domestic Product increased at a 3% annual rate between July and September, after expanding at a 3.1% pace in the 2nd quarter. The GDP growth in the 3rd quarter is explained by a smaller trade deficit and a a slight increase in inventory investment, which managed to compensate for the hurricane related slowdown in consumer spending and the slight decline in construction.
The Commerce Department said on Friday that while it was virtually impossible to estimate the impact of hurricanes Irma and Harvey on the US 3rd quarter GDP, preliminary estimates put the loses caused by the 2 storms together at $121 billion in privately owned fixed assets and $10.4 billion in government owned fixed assets. Hurricane Maria, which affected Puerto Rico and the Virgin Islands is not accounted for, i.e. it had no impact on US 3rd quarter GDP growth, as these islands are not included in America’s national accounts.
The previous forecast for the US economic growth in 2017’s 3rd quarter was 2.5%. As the United States economy continues to grow at a robust 3% clip in the 3rd quarter, we can assume that President Donald Trump is happy with hitting his growth target for the 2nd time since he entered the White House.
By the way, Obama’s 8 years into office never saw a single quarter over 3%. Trump’s first 10 months saw $5.2 trillion added to the stock market and 3% GDP growth.