US GDP Growth Rate at 3% in Q3, Beats Forecasts


The US economy expanded an annualized 3 percent on quarter in the third quarter of 2017, only slightly below 3.1 percent in the previous three months, which was the fastest pace since Q1 2015, the advance estimate showed. Figures beat expectations of 2.5 percent, despite the disruptions caused by hurricanes Harvey and Irma. Inventories rose sharply and trade made the biggest contribution to growth in nearly four years amid a fall in imports. It helped to offset a slowdown in consumer spending and fixed investment and a drop in construction.

Personal consumption expenditure (PCE) contributed 1.62 percentage points to growth (2.24 percent in Q2) and rose 2.4 percent (3.3 percent in Q2). Spending slowed for nondurable goods (2.1 percent compared to 4.2 percent) and services (1.5 percent compared to 2.3 percent) but rose faster for durable goods (8.3 percent compared to 7.6 percent).

Fixed investment added 0.25 percentage points to growth (0.53 percentage points in Q2) and increased 1.5 percent, compared to a 3.2 percent expansion in the second quarter. Investment rose less for equipment (8.6 percent compared to 8.8 percent) and shrank for structures (-5.2 percent compared to 7 percent) and residential (-6 percent compared to -7.3 percent) but rose faster for intellectual property products (4.3 percent compared to 3.7 percent). 

Private inventories added 0.73 percentage points to growth, compared to 0.12 percent in the second quarter. 

Meanwhile, exports went up at a slower 2.3 percent (3.5 percent in Q2) and imports shrank 0.8 percent, the sharpest decline in three years. As a result, the impact from trade was 0.41 percent, much higher than 0.21 percent in the second quarter and the biggest since the last quarter of 2013. 

Government spending and investment subtracted 0.02 percentage points from growth, compared to a 0.03 percentage point drag in the previous quarter. It fell 0.1 percent compared to a 0.2 percent drop in the second quarter. 

BEA | Joana Taborda | joana.taborda@tradingeconomics.com
10/27/2017 1:11:40 PM