Published: Thu, January 18, 2018
Finance | By Loren Pratt

USA third-quarter growth revised down but remains strong

USA third-quarter growth revised down but remains strong

The U.S. economy grew at a solid 3.2 percent annual rate from July through September, slightly slower than previously estimated but still enough to give the country the best back-to-back quarterly growth rates in three years. If, say, top-line growth in Gross Domestic Product (GDP) turns out to be 3.1 percent in 2018, it matters enormously if you thought growth would be 3.0 percent in the absence of TCJA versus if you thought growth would be 2.3 percent.

The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic growth, increased at a 2.6 percent rate instead of the previously reported 2.9 percent. While the tax overhaul ready for President Donald Trump's signature may give a boost in the coming year, economists say his goal of 3% sustained annual growth remains a challenge. My current forecast if for 3.5 percent real GDP growth in the fourth quarter, with 2.3 percent growth in the US economy for 2017 as a whole. However, durable goods spending was a bright spot in each of the past two reports, up 7.6 percent and 8.6 percent in the second and third quarters, respectively.

The report on third-quarter growth was the government's third and final look at the quarter. The fiscal stimulus will come while the economy is at full employment, which raises the risk of it overheating. And government spending growth was flat over the past year compared to 0.6 percent growth the previous three years.

Several economists are already predicting the economy will again climb above 3% in the fourth quarter.

. Profits rose at only a 0.1 percent pace in the second quarter.

Applications for unemployment aid increased 20,000 to a seasonally adjusted 245,000, the government said.

Last week marked the 146th straight week that claims remained below the 300,000 threshold, which is associated with a strong labour market.

"AT&T announced Wednesday that it will provide "$1,000 bonus to more than 200,000 AT&T USA employees" and "invest an additional $1 billion in the United States in 2018".

The claims data covered the survey period for December's nonfarm payrolls.

The economy added 228,000 jobs in November.

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