US revised second-quarter GDP up 3.0% vs 2.7% rise expected

[Independent voter]

Please don't move to Politics forum. Sure this has political ramifications but everything has political ramifications. It also has non-political ramifications.

Good news for the Republicans.






https://www.cnbc.com/2017/08/30/us-r...arter-gdp.html

The U.S. economy grew faster than initially thought in the second quarter, notching its quickest pace in more than two years, and there are signs that the momentum was sustained at the start of the third quarter.

Gross domestic product increased at a 3.0 percent annual rate in the April-June period, the Commerce Department said in its second estimate on Wednesday. The upward revision from the 2.6 percent pace reported last month reflected robust consumer spending as well as strong business investment.

Growth last quarter was the best since the first quarter of 2015 and followed a 1.2 percent pace in the January-March period. Economists had expected that second-quarter GDP growth would be raised to a 2.7 percent rate.

Retail sales and business spending data so far suggest the economy maintained its stamina early in the third quarter. Economists saw a limited impact on growth from Hurricane Harvey, which devastated parts of Texas.

"The impact on the national economy will be minor," said Gus Faucher, chief economist at PNC Financial Services in Pittsburgh. "While some output will be lost in the wake of the storm, most of the difference will be made up in the months ahead."

Growth estimates for the third quarter are as high as a 3.4 percent rate. Other data on Wednesday showed private employers ramped up hiring in August, adding 237,000 jobs to their payrolls. That was up from 201,000 jobs in July.

The ADP National Employment Report was released ahead of the government's more comprehensive employment report on Friday, which is expected to show solid job gains in August and diminishing labor market slack.

The dollar rose against a basket of currencies on the upbeat reports, while prices for U.S. Treasuries fell. Stocks on Wall Street were trading higher.

Strong growth and a labor market that is near full employment support views the Federal Reserve will lay out a plan to start unwinding its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities next month and increase interest rates in December.

With GDP quickening in the second quarter, the economy grew 2.1 percent in the first half of 2017. While that was up from the 1.9 percent reported last month, economists said it was unlikely growth this year would breach Republican President Donald Trump's ambitious 3.0 percent target.

"Underlying domestic demand in the economy is consistent with near three percent growth but the supply-side of the economy is not capable of delivering such a pace of growth at this point," said John Ryding, chief economist at RDQ Economics in New York.

The Trump administration is targeting tax cuts, deregulation and infrastructure spending to boost growth. However, it has so far failed to pass any economic legislation and is yet to articulate plans for tax reform and infrastructure.

Chances are slim that the Republican-controlled U.S. Congress will debate and pass tax reform legislation before the end of the year. So far, the political gridlock in Washington has not hurt either business or consumer confidence.

Robust consumer spending

Consumer spending, which makes up more than two-thirds of the U.S. economy, grew at a 3.3 percent rate, the fastest in a year, reflecting more spending on motor vehicles, cellphones, housing and utilities than previously estimated.

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.

But stronger consumer spending came at the expense of saving amid sluggish wage gains. The saving rate slipped to 3.7 percent from 3.9 percent in the first quarter. The second-quarter saving rate was previously reported at 3.8 percent.

Households cannot, however, continue to rely on savings indefinitely to fund their consumption. This raises doubts on the sustainability of the robust pace of consumer spending.

Despite the acceleration in consumer spending, inflation remained benign in the second quarter.

The Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, increased at a 0.9 percent rate as previously reported. Last quarter's rise was the slowest in more than two years and followed a 1.8 percent rate of increase in the first quarter.


Businesses helped to carry the economy in the second quarter, in part buoyed by a rebound in corporate profits. Spending on equipment jumped at a rate of 8.8 percent. That was the fastest in nearly two years and was an upward revision to the 8.2 percent pace reported last month.

Investment on nonresidential structures increased at a 6.2 percent pace, rather than the previously reported 4.9 percent rate. Inventory investment had a neutral effect on second-quarter GDP as previously reported after chopping off 1.46 percentage points from output in the first quarter.

Trade added two-tenths of a percentage point to growth. Housing was a drag on growth in the last quarter, with investment on homebuilding recording its worst performance in nearly seven years.

Government spending contracted for a second straight quarter, weighed down by decreasing state and local government investment. Motor vehicle production rebounded after two straight quarters of declines.

[Mormolyce]

In a sense it makes it harder for them - how do you justify that your policies caused strong growth when the growth was there before you implemented them? Getting above 3% is pretty unlikely.

Yeah, i'm really curious how the economy is going to do after GOP implement their tax cuts and deregulation like 15 years ago. At least Obama policies of the last 8 years are starting to show promise unlike his predecessor.

I imagine the rollback of the GFC era laws will be as effective as his rollback of flood protections.

Guess I can look forward to a strong AUD to USD ratio again about 4-8 years from now. Kek.

[Elite Peon]

The stock market is the best indicator because it 100% relies on the long forecast of the economy . The US is doing great and will continue to do so for many years . Thank you TRUMP.

[shimerra]

The stock market is the best indicator because it 100% relies on the long forecast of the economy . The US is doing great and will continue to do so for many years . Thank you TRUMP.

No it isn't. Unless you completely forget the 07 crash where people told us those lovely Mortgaged backed securities and collateralized debt obligations were perfect AAA investments. No one cared because it padded their stock prices and gave short term profits at the expense of the long term.

Shorting literally wouldn't be a thing if stock markets were 100% reliant on a long term forecast. Name one thing Trump has done other than his complete 100% lack of any major economic policy hasn't fucked up a Trend that started under Obama.

[Elite Peon]

No it isn't. Unless you completely forget the 07 crash where people told us those lovely Mortgaged backed securities and collateralized debt obligations were perfect AAA investments. No one cared because it padded their stock prices and gave short term profits at the expense of the long term.

Shorting literally wouldn't be a thing if stock markets were 100% reliant on a long term forecast. Name one thing Trump has done other than his complete 100% lack of any major economic policy hasn't fucked up a Trend that started under Obama.

WRONG...the rules have changed since the crash . The one good thing Obama did was to regulate the banks and lenders better after bailing them out to the toon of 10 trillion in debt . Btw I can name 100's of things Trump has done including deregulating energy which has added billions to our economy . He also has pulled out of job wrecking deals that had ZERO benefit to the US . Name and prove one thing he has done that has hurt our economy other than add 20% to the stock market and grow the GDP ...I will wait

[Gestopft]

WRONG...the rules have changed since the crash . The one good thing Obama did was to regulate the banks and lenders better after bailing them out to the toon of 10 trillion in debt . Btw I can name 100's of things Trump has done including deregulating energy which has added billions to our economy . He also has pulled out of job wrecking deals that had ZERO benefit to the US . Name and prove one thing he has done that has hurt our economy other than add 20% to the stock market and grow the GDP ...I will wait

Is this why bullshit is so cheap now?

Please, though, do provide which regulations have added billions. Maybe there's a list somewhere of regulations he's lifted, with the associated compliance costs?

Trump doesn't have any major legislation under his belt. There has hardly been enough time since he took office for any policies he could've passed to have had a huge effect. The effects of economic policy take a while to become apparent.

[Aggrophobic]

The stock market is the best indicator because it 100% relies on the long forecast of the economy . The US is doing great and will continue to do so for many years . Thank you TRUMP.

Thats not quite how it works and you do not have Trump to thank for the current economic boom.

[Blur4stuff]

I'd love to know which bills Trump signed into law that created an economic boom. Would also love an explanation how the current economy has nothing to do with Obama.

[hrugner]

In a sense it makes it harder for them - how do you justify that your policies caused strong growth when the growth was there before you implemented them? Getting above 3% is pretty unlikely.

The GDP should be getting a nice boost here shortly.

What will show up in GDP measures after the natural disaster is a perverse reaction in the months after the disaster. This comes because of the re-building activity that comes after the disaster. Repairing buildings, cleaning up, rebuilding all require paid services, building supplies, labor, etc. These transactions will show up in GDP measures in the months/quarters after the disaster as an slight increase in total GDP.

[Deleted]

Even after everything people try to discredit Trump (and everything he does to discredit himself), the markets appearently still have confidence in him and his policies.

Good news for Americans that like tomake something of their lifes in any case. There is so much money going around in that country that it's still the country of limitless possibilies and success.

[Medusa Cascade]

Thanks Obama

[Mittens]

If growth is at 3%, why would you need further tax cuts and deregulation? The economy is doing very well without them

Revamping our bloated tax code and regulations have little to do with how well our economy is doing.

[Taso]

Yeah, i'm really curious how the economy is going to do after GOP implement their tax cuts and deregulation like 15 years ago. At least Obama policies of the last 8 years are starting to show promise unlike his predecessor.

So would you give credit to jimmy carter and FDR for a prolong recession and depression?
Potus has very little control of the stock market and u.s economy as a whole. Sure some things that a president may do can create a boost in confidence but much of it falls between congress and the people of the u.s not the president. The federal reserve has much more of an impact then anything else.
As much as I love trump and his maga campaign, the GDP growth and low unemployment is separate of him. Pretty much no president deserves the credit on the success or failure of an economy.

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You think financial regulations in the US are bloated?

Theirs nothing wrong with deregulation or lowering taxes. You lower and close whatever loop holes their are, end the oil/ fossil fuels subsidies and corporate welfare and open up more trade on oil exports and the economy will do well.

[Machismo]

The stock market is the best indicator because it 100% relies on the long forecast of the economy . The US is doing great and will continue to do so for many years . Thank you TRUMP.

Almost everything you said was wrong, I hope you know that.

[Mittens]

You think financial regulations in the US are bloated?

Dunmo about financial regulations, but a lot of our other regulations are pretty useless.

[Spectral]

So far, the political gridlock in Washington has not hurt either business or consumer confidence.

Huh, if I didn't know better, I might think that governments don't actually need to be highly active and interventionist.

[Queen of Hamsters]

No doubt Trump and his followers will give him the credit, rather than the long-term work of previous governments...

[Ghostpanther]

This is not a subject thread which can survive not going into the politics forum. The Trump haters will attack any post which suggest Trump has anything to do with it. There is no way you can discuss this without bringing politics into it. But when it comes to reelection time, the American workers will remember.

[Toogoodman]

Yeah, i'm really curious how the economy is going to do after GOP implement their tax cuts and deregulation like 15 years ago. At least Obama policies of the last 8 years are starting to show promise unlike his predecessor.

I hate to break it to you, but the moment Trump won the economy started to boom. The reason for this was investor confidence, investors believe (and are correct) that tax cuts for individuals and business lead to better investment opportunities and healthier economic environments. Where as the 8 years of Obama fiscal policy lead to an extremely lack luster and anemic growth.

[Ghostpanther]

I hate to break it to you, but the moment Trump won the economy started to boom. The reason for this was investor confidence, investors believe (and are correct) that tax cuts for individuals and business lead to better investment opportunities and healthier economic environments. Where as the 8 years of Obama fiscal policy lead to an extremely lack luster and anemic growth.

Exactly. Job killing regulations which he ended with executive orders have given the economy a boost. And the results will be even more pronounced in the months to come. And this is what most people will see and want to continue. Prosperity for their families.