U.S. economy picks up steam; second-quarter GDP up 3.0% reflecting robust consumer spending and strong business investment

“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.”

Read more in the full article here.

“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.”

Read more in the full article here.

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.

Boom!

22 Comments

  1. A repatriation window with some stipulations would give major fuel to the portion of the economy that actually works for a living. Those that protest and whose feelings are hurt by a statue…sorry, it will not help.

  2. “Growth has persisted through the year despite the Washington gridlock, and the stock market has posted a series of record highs.”

    When President Trump works with the gridlock and gets things done for the people and NOT the powerful — to the moon, Alice!

  3. If you want to get a feel for the pulse of the economy, talk to the people who come to fix things in your house. The guy who is replacing the roof of my house said business is booming.

    1. Well, then it looks like it is time for the Fed to raise interest rates. It is easy for the economy to overheat when the Fed policy is to keep interest rates silly cheap.

    1. Written like a mature adult and one that doesn’t read. Since other countries are also doing well perhaps it is an umbrella effect and not something Trump has done (actually, he has done nothing but pontificate, threaten and disrupt to date). Your economy is at 2.1 % but is ‘predicted’ to go to 3% Whoop-de-doo. Canada just achieved 4.5% growth … and with a Liberal government no less.
      Grow the fsck up…

      1. The rise in business confidence following the election along with President Trump putting an end to the increase in regulations from the Obama administration are having a positive effect. The market shot up when he was elected and has continued to gain since then. A rule of thumb is that every dollar of stock gains produces five cents of additional spending. Look up “wealth effect.”

        1. Yes Markets did rise 10.5% under Trump but most economists agree that it is probably not due to Trump himself. The same logic you use could be used for Obama (Under Obama, the markets rose (221%). Not too shabby, but in either case, stock markets are not good indicators of how well a President’s policies are doing.

        2. “…the market shot up…”

          Well, that is simply because greedy Wall Street expected to see huge tax rate give-aways to the rich …whether they need them or not ! It has nothing to do with whether or not the beleaguered Trump administration planned to make fundamental changes that are generally good for the economy at large. In fact, it appears he is doing the opposite — dismantling many regulations put in place to moderate the excesses that brought us the Great Recession of 2007. (Also, note that neither Wall Street nor the 1% represents the economy at large.)

          The wealth effect has been proven false when wealth of a country is concentrated in so few hands such as, for example, the 1%. Because when the wealthy increase their wealth, they might stick in the bank (or buy a vacation home in Europe). When a middle or working class person’s income goes up, they spend it in the US economy.

          Therefore, it is better to stimulate the economy at large, than to give handouts to the already wealthy. Look up the macroeconomic spending “multiplier effect”.

        1. Free speech is one thing.

          Relentlessly stalking those you disagree with applying rapid fire multiple insults and nothing enlightening to say, day after day, clogging my inbox 100 times over should be banned.

          Lastly, it has nothing to do with free speech. It has everything to do with stalking bad behavior and maintaining decorum.

          And yes, thank the maker free speech is alive and well on MDN …

          1. Civilized free speech is one thing. But hateful, moronic speech espoused by you & your girlfriend, botvinnik, is quite another story. People like you are, of course, free to say what you want. But people like us do not have to tolerate the hateful and moronic things you say. Sadly, MDN is an enabler. According to Trump, we are sure there are “many fine people” at MDN…

            1. President Trump never said that. So much for your accuracy and interpretation of my posts.

              Please provide quotes where I say hateful things. I’ll save you the trouble, NONE exist.

              Sorry snowflake, it is easy to hurl anonymous insults according to a skewed political perception MINUS FACTS.

              Means absolutely nothing …

      1. As can be seen in the graphic of quarterly GDP, the growth rate in Q2 14 was 4.6% …and it was 5.2% in Q3 14. 3% is no big deal.

        Reality is a constraint. Who complains about Fake News again???

  4. The recovery is essentially jobless, with the GDP rising from Wall St. investors buying and selling from each other end quantitative easing financing the pentagon which is the fastest growth segment in the US economy. The same principles apply to Great Britain. Workers work more, get paid less supporting the idea that Main St.’s wealth continues to be sucked upward by the 1% whom, really, MDN seems to honor.

    1. MDN may “seem to honor” the 1%, but it’s actually our boy Barry who you will find hobnobbing with them on their Mega Yachts going to their private islands with notable Hollywood movie stars. You can’t get a better definition of hypocrisy of the Left that likes to pull that 1%ers Identity Politic shit on the evil Wall Street Right then that! And it if wasn’t for Wall Street, Obama wouldn’t have had any economic recovery at all.

    1. That’s to be expected from the party out of power after eight years of near failure. They cannot face up to the reasons and correct their errors. Instead, attack your opponents relentlessly and turn a blind eye to progress, particularly when the opposing party succeeds …

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