'Trump Economy' Running Strong 3% GDP Despite Hurricanes

by Frankie Norman October 28, 2017, 0:06
'Trump Economy' Running Strong 3% GDP Despite Hurricanes

The U.S. economy stood tall last quarter against one of the most active Atlantic hurricane seasons in history. He adds, "Economic growth has reached or exceeded the 3 percent rate a number of times during this recovery, but the economy hasn't been able to sustain that pace". On top of that, the United States is almost at full employment with a jobless rate of 4.2 percent.

It turns out that the USA economy is doing just fine without tax cuts.

"Despite the first estimate of US GDP for the third quarter showing a strong print, the reality is quite different".

This is the first measure of the economy since Hurricanes Harvey and Irma hit the US, crippling production in the Southeast region of the country. "Jobs have been improving, consumption's been improving, businesses are doing better, there is a profound inequality problem but the United States economy, despite not much from President Trump, has been doing well".

Commerce Secretary Wilbur Ross asserted that Friday's GDP report "proves that President Trump's bold agenda is steadily overcoming the dismal economy inherited from the previous administration".

The Trump administration itself said the economy in 2017 would grow by around 2.3 percent, only rising to 3 percent by 2020. Economists polled by Reuters predicted the economy would grow at a 2.6 percent annualized rate in the second quarter, which was on target for the initial reading the Commerce Department released on July 28.

Even hurricanes weren't enough to stop impressive growth in the economy. "We expect GDP growth to slow to only 1.5%".

The US central bank is expected to increase interest rates for a third time this year in December.

The department said while it was impossible to estimate the overall impact of hurricanes Harvey and Irma on third-quarter GDP, preliminary estimates showed that the back-to-back storms had caused losses of $121.0 billion in privately owned fixed assets and $10.4 billion in government-owned fixed assets. Outside of the areas directly affected by the hurricanes, there are a few signs of weakness.

Third-quarter growth was a pleasant surprise after economists projected expansion of 2.5 percent.

The price index for consumer spending, a closely-watched measure of inflation, increased at 1.3% in the third quarter, excluding food and energy. Businesses went a bit MAGA, building up inventory in anticipation of strong demand.

Growth in consumer spending slackened, most likely due to Hurricanes Harvey and Irma.

Trade also played a hand in the good report, adding 0.4 percentage point to growth as exports grew at a 2.3 percent rate while imports fell 0.8 percent. Trump and Republicans are pressing to enact tax cuts that they say will boost expansion.


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