US Q2 eco­nomic growth gains pace

The Gulf Today - Business - - Front Page -

WASH­ING­TON: The US econ­omy grew a bit faster than pre­vi­ously es­ti­mated in the sec­ond quar­ter, record­ing its quick­est pace in more than two years, but the mo­men­tum prob­a­bly slowed in the third quar­ter as Hur­ri­canes Har­vey and Irma tem­po­rar­ily curbed ac­tiv­ity.

Gross do­mes­tic prod­uct in­creased at a 3.1 per cent an­nual rate in the April-june pe­riod, the Com­merce De­part­ment said in its third es­ti­mate on Thurs­day. The up­ward re­vi­sion from the 3.0 per cent rate of growth re­ported last month re­flected a slightly faster pace of in­ven­tory in­vest­ment.

Growth last quar­ter was the quick­est since the first quar­ter of 2015 and fol­lowed a 1.2 per cent pace in the Jan­uary-march pe­riod. Econ­o­mists had ex­pected that the sec­ond-quar­ter GDP growth rate would be un­re­vised at 3.0 per cent.

Har­vey, which struck Texas, has been blamed for much of the de­cline in re­tail sales, in­dus­trial pro­duc­tion, home­build­ing and home sales in Au­gust. Fur­ther weak­ness is an­tic­i­pated in Septem­ber af­ter Irma slammed into Florida early this month.

Re­build­ing is, how­ever, ex­pected to boost GDP growth in the fourth quar­ter and in early 2018. Es­ti­mates for the growth rate in the July-septem­ber pe­riod are just above 2.2 per cent.

How­ever, they could be raised af­ter another re­port from the Com­merce De­part­ment on Thurs­day showed a de­cline in the goods trade deficit in Au­gust as well as large in­creases in both re­tail and whole­sale in­ven­to­ries. Har­vey and Irma con­tinue to im­pact the labour mar­ket and are ex­pected to cut into job growth this month. In a third re­port, the La­bor De­part­ment said ini­tial claims for state un­em­ploy­ment ben­e­fits in­creased 12,000 to a sea­son­ally ad­justed 272,000 for the week ended Sept. 23.

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