US economy likely slowed by hurricanes in third quarter

WASHINGTON: US economic growth probably slowed in the third quarter as hurricanes Harvey and Irma restrained consumer spending and undercut construction activity, but underlying momentum likely remained strong amid robust business investment on equipment.

According to a Reuters survey of economists, gross domestic product likely increased at a 2.5 per cent annual rate in the July-September period after a brisk 3.1 per cent pace in the second quarter.

The Commerce Department will publish its first estimate of thirdquarter GDP growth on Friday at 8:30 am EDT (1230 GMT).

Without the hurricane-related disruptions, economists say thirdquarter GDP growth would have either matched or beat the pace set in the April-June quarter.

“Despite the temporary disruption to construction and consumer spending that will be visible in the third quarter data, the real takeaway from the report will be how resilient overall US GDP growth continues to be,” said Scott Anderson, chief economist at Bank of the West in San Francisco.

Economists estimate that Harvey and Irma, which devastated parts of Texas and Florida, chopped off at least one percentage point from third-quarter GDP growth.

With post-hurricane labour market, retail sales and industrial production data already showing a rebound in activity, Friday’s report will probably have no impact on monetary policy in the near term. — Reuters