The Commerce Department said Wednesday that the economy had expanded at an annual rate of 3 percent in the second quarter of the year, better than initially estimated, and a substantial acceleration over the first quarter's lackluster 1.2 percent pace.
The bureau will release its third estimate for the second quarter of 2017 on September 28. Gains were powered by consumer spending, which may not remain so strong. He predicted GDP would grow close to 3 per cent this quarter. The average of real GDP and real GDI, a supplemental measure of US economic activity that equally weights GDP and GDI, increased 3.0 percent in the second quarter, compared with an increase of 2.0 percent in the first quarter. Both consumer spending and business investment are likely to sustain weaker performance as a result, but most of the drag is likely to come from net exports - with refined product exports hard hit given the outages of Gulf Coast refineries and ports shuttered.
Investment by businesses also improved to growth of 6.9 per cent, reflecting higher spending on structures, equipment and intellectual property.
Outlays of business investment rose at a revised 0.6% clip in the second quarter, up from a prior 0.4% estimate.
Consumer spending, biggest part of the economy, grew 3.3 percent (estimated 3 percent), most since second quarter of 2016 and revised from 2.8 percent.
The US economic expansion gathered pace in the second quarter. This morning, Bloomberg shows the USA dollar up 0.80% against the loonie, at $1.26.
That was revised up from the 2.8 percent pace reported in July and accounted for the bulk of the pickup in economic growth in the second quarter.
US President Donald Trump has said he wants to see the US economy increase by 3% for 2017.
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Economists say that the most-recent data suggest the U.S.is on track to maintain a 3%-plus clip in the third quarter. Some are now saying that the devastation from Hurricane Harvey could shave about a half-percentage point off growth this quarter.
BMO senior economist Sal Guatieri isn't revising the bank's forecast for GDP in Q3.
"Soft inflation is raising questions over whether the Fed will go ahead with another interest-rate hike this year", MarketWatch noted.
GDP increased by about 1.5% in 2016 in the United States and by 2.9% in 2015, according to the BEA.
Mark Zandi, chief economist at Moody's Analytics, forecasts annual growth of 2.1%.
The economy will also be boosted by higher spending on the military and infrastructure projects, Zandi said.
But economists said it did not alter the picture significantly.
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