“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,” Reuters reports. “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.”
“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,” Reuters reports. “‘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,” Reuters reports. “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… 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.”
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“When President Donald Trump predicted that his policies would spur growth of 3 percent or more, a lot of economists didn’t take him seriously. They may now,” Jeff Cox reports for CNBC. “The latest figures on the economy show that breakout economic growth may not just yet be at hand, but it’s certainly within reach.”
“‘If we achieve sustained 3 percent growth, that means 12 million new jobs and $10 trillion of new economic activity. That’s some number,’ Trump said during a speech Wednesday in Missouri promoting tax reform. ‘I happen to be one that thinks we can go much higher than 3 percent. There’s no reason we shouldn’t,'” Cox reports. “The economy grew at just a 1.5 percent pace during President Barack Obama’s two terms that began in 2009 as the Great Recession was ending. His second term in office saw GDP average 2.1 percent a year, but overall Obama presided over the worst recovery since the Great Depression. Trump’s term has begun with gains of 2.1 percent for the first half, but that’s likely to accelerate into the second half.”
‘The Atlanta Fed is projecting GDP to jump 3.4 percent in the third quarter,” Cox reports. “The upward revision was due to increased consumer spending and business investment, providing yet more ammunition to expectations for better growth. And the GDP revision came the same day that ADP reported private payroll growth of 237,000, the best number since March… Trump’s pro-business agenda of lower taxes and increased infrastructure spending has stalled in Congress, though he has been able to enact some regulatory rollbacks through executive orders. Growth has persisted through the year despite the Washington gridlock, and the stock market has posted a series of record highs.”
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MacDailyNews Take: Now imagine if the U.S. Congress would actually enact much-needed personal income and corporate tax reform alongside a repatriation tax holiday.