Sep 28, 2017
2017 Q2: Economy Grew At A 3.1 Percent Rate (Final Estimate)
Post by Freedom Partners
Today, the U.S. Department of Commerce released its third and final estimate of gross domestic product (GDP) for the second quarter of 2017, announcing that the U.S. economy expanded at an annualized rate of 3.1 percent, revised up from the 3 percent preliminary estimate reported last month, and up from the 1.2 percent growth rate during the first quarter of 2017.
Driven by higher consumer spending, today’s release marks the fastest the economy has expanded since the first quarter of 2015 when the economy grew at a 3.2 percent rate.
Despite the strong growth, work still needs to be done to get the economy moving again. Washington has a once-in-a-generation opportunity to enact comprehensive tax reform, which establishes a simpler, fairer, and more honest tax system that boosts economic growth, creates more jobs, increases wages for the American people, and makes U.S. companies more competitive worldwide.
When Congress provided bold tax relief during the tax cuts of 1964,1981, and 2003, the economy grew faster, millions of jobs were created, and individuals and families were able to keep more of their hard-earned income. Additionally, the government was able to take in more revenue, not less.
Below is a deeper look at the numbers from today’s report and what they say about the state of the U.S. economy and labor market.
Here are the facts:
2017 Quarterly Growth: The economy grew at an average quarterly rate of 3.1 percent during the second quarter of 2017, the strongest rate observed over the last 2 years. So far in 2017, the economy has grown at an average quarterly rate of 2.2 percent, 0.8 percentage points faster than the same period during 2016.
Post-Recession Growth Rate: From 2010 to 2016, the economy averaged a mere 2.1 percent quarterly growth rate. This is significantly lower than the 4.4 percent average quarterly growth rate observed during the 5 years following the last three major tax reform enactments.
Pre-Recession Growth Rate: From 1946 to 2007, the U.S. economy expanded at an average quarterly rate of 3.5 percent, significantly higher than the growth rate observed during the current post-recession expansion and 0.4 percentage points higher than the growth rate observed during the second quarter of 2017.
Higher Business Investment And Falling Residential Spending: Business investment grew by 6.7 percent during the second quarter of 2017. This was driven largely by an increase in spending on equipment and structures, growing at 8.8 percent and 7 percent respectively. Residential investment hindered economic growth falling at 7.3 percent rate. Spending on residential properties fell for the first time since the third quarter of 2016, and marked the slowest rate since 2010.
Consumer Spending Growth: Consumer spending, which accounts for roughly 70 percent of U.S. economic activity, grew at an annual rate of 3.3 percent during the during the second quarter of 2017, the fastest reading since the second quarter of 2016. Overall, consumer spending increased 1.4 percentage points faster than the first quarter of this year, and 0.4 percentage points faster than the rate observed during the fourth quarter of 2016.