US economy expanded by 3% in the third quarter of 2017
The US economy performed better than expected in the third quarter, expanding at an annual rate of 3% in the three months to end of September, the Commerce Department said Friday.
Analysts were expecting growth of around 2.5% after the damage caused by Hurricane Harvey, Irma and Maria. However, the economic effect of the back-to-back hurricanes wasn’t as severe as expected.
Ian Shepherdson of Pantheon Macroeconomics, said:
“Overall, this is a very solid performance, given the disruption caused by Hurricanes Harvey and Irma.”
“Their net effect seems to have been smaller and shorter than we expected.”
The increase in real GDP in the third quarter reflected positive contributions from personal consumption expenditures, private inventory investment, nonresidential fixed investment, exports, and federal government spending.
Consumer spending slowed to 2.4% growth in the third quarter from 3.3% in the previous quarter.
The US economy, which has expanded for eight years straight with unemployment at 4.2% – the lowest level since 2001 – has added jobs in 83 of the past 84 months.
U.S. Secretary of Commerce Wilbur Ross said in a statement:
“Today’s release of the gross domestic product growth for Q3 2017 proves that President Trump’s bold agenda is steadily overcoming the dismal economy inherited from the previous Administration. This is a remarkable achievement in view of the recent hurricanes which have shattered so many lives. As we work together to help those areas recover, I am confident that they will rebound stronger than ever before. And as the President’s tax cut plan is implemented, our entire economy will continue to come roaring back.”
Kenneth Rogoff, a professor of economics at Harvard University, was quoted by the BBC as saying:
“Let’s make no mistake – this was a very good number.”
However, he added, “Jobs have been improving, consumption’s been improving, businesses are doing better, there is a profound inequality problem but the US economy, despite not much from President Trump, has been doing well.”