Economy Grows Faster than Previously Thought in the Second Quarter
31 Августа 2017, 01:38 | Lionel James
Globe and Mail Update
The trade picture has improved so far in 2017 relative to challenges seen in each of the past two years, with positive contributions to real GDP in both the first and second quarters.
President Donald Trump has repeatedly cited as his goal raising USA economic growth at an annual rate of 3 percent after eight years in which former President Barack Obama could not reach this benchmark in any quarter.
Paul Ashworth, chief USA economist at Capital Economics, said the strength in consumer spending should result in an "even stronger hand-off" for growth going into the current quarter. In the first quarter, real GDP increased 1.2 percent.The GDP estimatereleased today is based on more complete source data than were available for the "advance" estimate issued last month.
The second-quarter GDP estimate is the best showing since a 3.2% gain in the first quarter of 2015.
Somewhat stronger consumer spending and business investment were behind the upward revision.
Economists are not looking for Hurricane Harvey to make much of an impact on economic growth, believing that a spike in the cost of gasoline and other energy prices will be short-lived as refineries along the Texas Gulf Coast resume operations quickly.
Past year the economy grew a meagre 1.5%, the poorest showing since 2009 when GDP shrank by 2.9%.
Additionally, private payrolls increased by 237,000 in August, largely through gains in the manufacturing and construction industries, CNBC reported on Wednesday. That was up from 201,000 jobs in July. The growth rate in the January-March quarter was a lacklustre 1.2%.
Spending by governments, which had grown 0.7% in the initial estimate, was revised to a decline at a 0.3% rate. The economy grew 2.1% in the first half of 2017 but economists said it was unlikely growth this year would meet Trump's goal.
Commerce also revised upward its estimate of business investment, to a 0.6 percent pace from the initial 0.4 percent.
This is the fastest quarterly growth rate in more than two years.
Current-dollar GDP increased 4.0 percent, or $189.0 billion, in the second quarter to a level of $19,246.7 billion.
The upgrade was also considerably higher than preliminary estimates of 2.6 per cent, and also represented a considerably faster expansion than economists had expected, at 2.7 per cent.
The GDP and PCE price deflators were little changed, increasing by 1.0% and 0.9% annualized in the second quarter.
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