Gross Domestic Product surged ahead, more than doubling the growth seen in the first quarter this year with the final estimate in the second quarter, according to according to the U.S. Bureau of Economic Analysis.
GDP increased at an annual rate of 3.1% in the second quarter, according to the third and final estimate. This is up from the 3% growth projected in the second estimate, and more than double the 1.4% growth seen in the first quarter.
The chart below shows this is the first quarter GDP reached over 3% since the first quarter of 2015.
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HousingWire recently examined whether President Donald Trump is on track to fulfilling his campaign promise of 4% GDP growth. While an increase to 3.1% would seem to suggest that he is, the growth may be short lived.
A new data report from Goldman Sachs shows the recent hurricanes, including Hurricane Harvey which stands as the second most sever natural disaster in the U.S. since World War II, could have a downward pull on the third quarter’s GDP growth.
However, not all experts agree. One expert explained the third quarter may still see strong growth, despite hurricanes Harvey and Irma.
“The varied data releases published this morning add to the evidence that, even though the hurricanes did cause some temporary disruption, third-quarter GDP growth will still be between 2.5% and 3.0% annualized,” Capital Economics Chief Economist Paul Ashworth said.
The GDP estimate released is based on more complete data than was available for the second estimate issued last month. In the final estimate, personal consumption expenditures and exports increased, but the general picture of economic growth remains the same.
Real gross domestic income increased 2.9% in the second quarter, up from 2.7% in the first quarter. The average of real GDP and real GDI, supplemental measure a measure of U.S. economic activity that equally weights GDP and GDI, increase 3% in the second quarter, up from 2% in the first quarter.
The main driver of the increase in the second quarter can be attributed to increases in personal consumption expenditures, nonresidential fixed investment, exports, federal government spending and private inventory investment. These were partially offset by decreases in residential fixed investment and state and local government spending. Imports, which are a subtraction from GDP, increased.
Here are updates to the previous estimate:
Current-dollar GDP: Increased to 4.1%, up from last estimate’s 4%
Average of real GDI and real GDP: Held steady at 3%
Gross domestic purchases price index: Increased to 0.9%, up from last estimate’s 0.8%
Personal consumption expenditures: Held steady at 0.3%