Published: Fri, October 27, 2017
Business | By Max Garcia

United States economy grows more than expected in Q3

United States economy grows more than expected in Q3

US GDP increased at a 3.0% annual rate in the July-September frame after expanding at a 3.1% pace in Q-2 the Commerce Department said Friday.

A reading on core consumer prices, which exclude food and energy prices, showed that the pace of price growth accelerated to 1.3 percent in the third quarter from 0.9 percent in the second quarter.

The US economy grew faster than expected in the third quarter even after hurricanes disrupted activity in some parts of the country.

"An interest hike in December is pretty much a foregone conclusion now".

The economic recovery since the Ys 2007-2009 recession is now in its 8th year and showing little signs of fatigue.

Though U.S. stocks have risen in anticipation of President Donald Trump's tax reform, the administration has yet to enact any significant new economic policies.

President Trump took office vowing to return the United States to sustained 3% annual GDP growth or better, but economists say this is unrealistic.

The dollar index, a measure of the U.S. currency against a basket of its major rivals, climbed 0.4% to 94.95, while the dollar gained 0.4% versus the euro to $1.1601. But trade added 0.4 percentage point to growth as exports grew at a 2.3 percent rate while imports fell 0.8 percent. Trade has contributed to output for three quarters in a row.

Falling personal spending and business investment explained the marginal slowdown, according to the BEA. The "second" estimate for the third quarter, based on more complete data, will be released on November 29.

Despite the moderation in consumer spending, inflation perked up in the third quarter, likely as a result of disruptions to the supply chain caused by the storms. It was the strongest two-quarter showing since back-to-back gains of 4.6 percent and 5.2 percent in the second and third quarters of 2014.

The price index for gross domestic purchases increased 1.8 percent in the third quarter, compared with an increase of 0.9 percent in the second quarter.

Current-dollar personal income increased $113.7 billion in the third quarter, compared with an increase of $119.1 billion in the second.

Investment in homebuilding, which was already undermined by land and labor shortages, also took a hit from Harvey and Irma. Residential construction fell at a 6 percent rate following a 7.3 percent rate of decline in the second quarter. Government spending fell for a third straight quarter, dropping 0.1 percent.

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