US revises growth up a notch for second quarter
The new Commerce Department report for the April-June 2017 period pushed US economic growth above President Donald Trump's three per cent target. (Photo: AFP/Bryan R Smith)
WASHINGTON: The US economy grew marginally faster in the second quarter than previously reported, with bumps in estimated air travel, retail and spending on farm inventories, official figures showed on Thursday (Sep 28).The new Commerce Department report for the April-June period pushed US economic growth above President Donald Trump's three per cent target.The world's largest economy grew at an annual rate of 3.1 per cent in the second quarter, up a tenth of a percentage point from the estimate published last month, which was already the fastest growth in more than two years.Based on newly available agricultural and Census Bureau data, the revision surprised analysts, who had not been expecting any change.President Trump and congressional Republicans this week unveiled plans for broad-based tax cuts as part of ambitious efforts, along with trade negotiations and slashed regulations, to boost annual growth to three percent.Trump has also hailed recent job creation and growth figures, taking credit even though his administration has yet to enact any major new fiscal or tax policies.
Still, the new second quarter figures bring growth in the first half of 2017 to 2.2 per cent - broadly in line with US economic expansion in recent years but well below the three-per cent target, which many economists say may be unrealistic.The upward revision to the second quarter partly reflected increased estimates of spending by state and local governments as well as newly reported spending by farms and consumer spending on services.However, sluggish and declining housing sales weighed on the overall result, with home buying slowing by 7.3 per cent, 0.8 points below the first estimate - the steepest decline for this measure in nearly seven years."Altogether, the third estimate of Q2 GDP paints a solid picture of the economy," Blerina Uruci of Barclays said in a research note.
"While growth in Q1 slowed significantly, it rebounded strongly in the following quarter suggesting likely temporary factors drove the weakness at the start of the year."With three hurricanes having hit the US in the space of a month between August and September, economists expect growth in the third quarter to slow significantly before rebounding at the end of the year.The Atlanta Federal Reserve Bank, which produces a running forecast for quarterly GDP growth, adjusted its third-quarter estimate to 2.1 per cent, a tenth of a point lower than growth in the first half.