Nov 29, 2017
2017 Q3: Economy Grew At A 3.3 Percent Rate (Preliminary Estimate)
Post by Freedom Partners
Today, the U.S. Department of Commerce released its second estimate of gross domestic product (GDP) for the third quarter of 2017, announcing that the U.S. economy expanded at an annualized rate of 3.3 percent, up from the 3 percent reported last month, and up from the 3.1 percent rate during the second quarter of 2017.
Driven by higher consumer and business spending, today’s release marks the second consecutive quarter of at least 3 percent growth and the first time two consecutive quarters have had over 3 percent growth since the third quarter of 2014.
Still, Washington can take steps to ensure this promising growth remains and even accelerates further. Congress 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 annualized rate of 3.3 percent during the third quarter of 2017, marking the second consecutive quarter of at least 3 percent growth. So far in 2017, the economy has grown at an average quarterly rate of 2.5 percent, 0.6 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 0.2 percentage points higher than the growth rate observed during the third quarter of 2017.
Higher Business Investment And Falling Residential Spending: Business investment grew by 4.7 percent during the third quarter of 2017. This was driven largely by an increase in spending on equipment, which grew at a 10.4 percent rate. Residential investment hindered economic growth falling at a 5.1 percent rate. Spending on residential properties fell for the second consecutive quarter, after last quarter’s report that residential spending had declined by the most since 2010.
Consumer Spending Growth: Consumer spending, which accounts for roughly 70 percent of U.S. economic activity, grew at an annual rate of 2.3 percent during the during the third quarter of 2017. Overall, consumer spending is 1 percentage points slower than the rate observed during the second quarter of this year, and 0.4 percentage points faster than the rate observed during the first quarter.