Economic Watch: Growth Revised to Highest Level in 3 Years, Consumers Upbeat
Total U.S. economic activity in the third quarter of the year increased more than originally estimated, according to revised numbers issued Wednesday by the Commerce Department.
It reported the nation’s gross domestic product (GDP) grew at an annual rate of 3.3%, beating analysts’ expectations and up from a 3% rate reported a month earlier. This is also the best pace since the second quarter of 2014 and compares to a second quarter 2017 rate of 3.1%.
This also marked the first time this total measure of the output of goods and services has increased 3% or more for two straight quarters since 2014.
Business investment increased at a 7.3% annual rate in the third quarter, the biggest pickup for that category since the end of 2016, according to AP. However, consumer spending, which accounts for about 70% of U.S. economic output, grew at an annual pace of just 2.3%, down from 3.3% in the second quarter.
The third quarter was also when the U.S. mainland felt the effects of two devastating hurricanes while there was also a downturn in imports. In addition, there were smaller decreases in state and local government spending and residential fixed investment.
With the GDP posting a lackluster 1.2% gain in the first quarter of the year, Lindsey Piegza, chief economist at Stifel Fixed Income, noted that overall growth is trending at 2.5% thus far for 2107, modestly above the 2.2% pace established since the end of the financial crisis. Year over year, growth continues to trend at a 2.3% pace, up slightly, however, from a 2.2% pace reported at the end of the first half of the year.
“Since April, the U.S. economy has been growing at a noticeably accelerated 3% clip relative to a more moderate 2.2% trend of the past eight years. But while growth has been more impressive …Read the rest of this story
