31 August, 2017
On the stump for an overhaul of the nation's tax system, President Donald Trump on Wednesday said that cutting taxes would "bring back Main Street" and spur the US economy to a level of growth not seen since the Great Recession.
In its second of three estimates, the Commerce Department said Wednesday that gross domestic product rose at a 3% annual rate in the April-June period, an upward revision from the 2.6% reported last month and the strongest growth since the first quarter of 2015.
The revision lifted the annual GDP growth rate from the earlier 2.6% estimate, with growth accelerating from a slow start to the year.
The upgrade was also considerably higher than preliminary estimates of 2.6 per cent, and also represented a considerably faster expansion than economists had expected, at 2.7 per cent.
Inflation as measured by the Fed's preferred PCE index decelerated sharply to a 0.3% gain in the second quarter down from a 2.2% increase in the first quarter.
Real GDP in the second quarter of 2017 did show an increase from the previous year, when GDP expanded at 1.1 percent in the second quarter of 2016, according to the second estimate.
Economists say that the most-recent data suggest the U.S.is on track to maintain a 3%-plus clip in the third quarter.More news: Trump says tax overhaul will 'bring back Main Street'
Hurricane Harvey's pummeling of major population and production centers in Texas and Louisiana will likely constrain growth in the third quarter. But net exports are expected to weigh more the growth, with refined product exports hard hit given the outages of Gulf Coast refineries and ports shuttered.
Mr Trump plans tax cuts, deregulation and infrastructure spending but the administration has yet to pass any economic legislation amid gridlock on Capitol Hill. Growth in the first quarter of the year was 1.2 percent.
Real gross domestic income (GDI) growth for the second quarter came in at 2.9%.
The higher figure in this revision stemmed largely from stronger consumer and business spending than estimated in the advance release. This is not far from the 2.1 percent average growth rate seen since the Great Recession, but I continue to believe that there is upward potential in the forecast, especially for 2018, if pro-growth policies are enacted.
Investment on nonresidential structures increased at a 6.2 percent pace, rather than the previously reported 4.9 percent rate.
Residential fixed investment and state and local government spending were both downwardly revised, offsetting a larger second quarter increase.