SEVERE WX : Winter Weather Advisory View Alerts

US economy grew at solid 3.2 percent rate in third quarter

The U.S. economy grew at a solid 3.2 percent annual rate from July through September, slightly slower than previously estimated but still enough to give the country the best back-to-back quarterly growth rates in three years.

Posted: Dec 21, 2017 1:29 PM

WASHINGTON (AP) — The U.S. economy grew at a solid 3.2 percent annual rate from July through September, slightly slower than previously estimated but still enough to give the country the best back-to-back quarterly growth rates in three years.

The figure was revised down from last month’s estimate of 3.3 percent, the Commerce Department reported Thursday. The change reflected a bit less spending by consumers, which was offset somewhat by increased spending by state and local governments.

Still, the 3.2 percent growth followed a 3.1 percent gain in the second quarter, the first consecutive quarters that growth has topped 3 percent since 2014.

President Donald Trump has pointed to these gains as evidence his economic program is producing results. Many economists believe GDP growth this quarter could hit 3 percent or better.

Congress this week passed a major tax overhaul, giving Trump the biggest legislative achievement of his first year in office. Economists believe the proposal will boost growth temporarily in 2018 and possibly 2019. But then they forecast that the positive effects will fade, with slower growth going forward due to higher interest rates stemming from the bigger government deficits.

But at the moment, economists are optimistic about growth prospects. The Federal Reserve’s Atlanta regional bank is forecasting GDP growth could hit 3.3 percent this quarter. If GDP does top 3 percent, it would mark the first time that has occurred since three quarters in late 2004 and early 2005.

Trump has predicted the tax cuts will be “rocket fuel” for the economy and many economists are looking for a growth spurt next year.

“The economy is rock solid for now and with fiscal stimulus kicking in next month, the economy’s afterburners could put this economy’s rocketing growth rate into even higher orbit,” Chris Rupkey, chief financial analyst at MUFG Union Bank in New York, said in reaction to the new GDP report.

For all of 2017, the economy is expected to grow around 2.3 percent, a marked improvement from the slight 1.5 percent gain in GDP in 2016. For 2018, economists believe growth will be even better, helped by the boost from the Republican tax cuts and a stronger global economy.

Mark Zandi, chief economist at Moody’s Analytics, is forecasting growth of 2.9 percent for 2018, reflecting tax cuts that he predicts will add 0.4 percentage point to GDP next year. He expects the tax cuts to add 0.2 percentage point to growth in 2019. But even with that boost, he sees GDP slowing to a 2.2 percent rate in 2019 before slowing to 1 percent growth in 2020 as the higher interest rates drag on growth.

This forecast is in line with other analysts who see only a temporary gain from the tax cuts. They are at odds with forecasts of the Trump administration that the tax cuts will spur significant momentum that will lift the economy to sustained annual GDP gains of 3 percent or better.

The report on third quarter growth was the government’s third and final look at the quarter. The economy showed resilience last quarter in the face of two hurricanes: Harvey, which hit Texas in late August, and Irma, which battered Florida in September.

The U.S. economy is benefiting from a pickup in global growth, a healthy job market, which supports consumer spending, and a drop in the value of the dollar against other major currencies, which makes U.S. products less expensive in foreign markets.

What you need to know:

— Business investment in equipment shot up at a 10.8 percent rate, the best showing since the third quarter of 2014.

— Consumer spending, which accounts for about 70 percent of U.S. economic output, grew at an annual pace of 2.2 percent, a slight 0.1 percentage point less than last month’s estimate.

— Government spending and investment rose for the first time in three quarters, with spending by state and local governments revised to a small positive from a slight negative in the previous report.

— Housing construction fell for a second quarter, but the drop was not as severe as previously reported.

— The 1.5 percent annual GDP gain last year was the weakest performance in six years, since the economy contracted by 2.9 percent in 2009.

—GDP growth has averaged around 2 percent in the current recovery, which is now in its ninth year and is the third longest in U.S. history.

Lafayette
Partly Cloudy
29° wxIcon
Hi: 34° Lo: 28°
Feels Like: 29°
Kokomo
Cloudy
25° wxIcon
Hi: 31° Lo: 24°
Feels Like: 25°
Rensselaer
Cloudy
28° wxIcon
Hi: 33° Lo: 28°
Feels Like: 28°
Lafayette
Partly Cloudy
29° wxIcon
Hi: 34° Lo: 28°
Feels Like: 29°
Danville
Partly Cloudy
29° wxIcon
Hi: 35° Lo: 29°
Feels Like: 23°
Frankfort
Mostly Cloudy
28° wxIcon
Hi: 33° Lo: 29°
Feels Like: 23°
Frankfort
Cloudy
28° wxIcon
Hi: 32° Lo: 27°
Feels Like: 23°
Monticello
Cloudy
25° wxIcon
Hi: 33° Lo: 27°
Feels Like: 25°
Monticello
Mostly Cloudy
25° wxIcon
Hi: 35° Lo: 28°
Feels Like: 25°
Logansport
Cloudy
27° wxIcon
Hi: 32° Lo: 25°
Feels Like: 27°
Heaviest precipitation Monday-Monday night....
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 608519

Reported Deaths: 9693
CountyCasesDeaths
Marion840461335
Lake45349684
Allen32803548
Hamilton29394315
St. Joseph27380381
Elkhart24404345
Vanderburgh19411249
Tippecanoe17970138
Johnson15069295
Porter14783169
Hendricks14401248
Madison10965221
Vigo10726181
Clark10677144
Monroe9383110
Delaware9116134
LaPorte9065163
Howard8236144
Kosciusko806983
Warrick672999
Hancock6697104
Bartholomew6484100
Floyd6428110
Wayne6136162
Grant5991115
Dubois555579
Boone551168
Morgan541295
Henry507864
Marshall503984
Cass483263
Dearborn479845
Noble473059
Jackson425047
Shelby417581
Lawrence391079
Clinton373043
Gibson370359
Harrison348144
DeKalb347164
Montgomery345754
Knox335639
Miami321444
Steuben313745
Whitley307326
Wabash303251
Adams300936
Ripley298445
Putnam296850
Huntington291659
Jasper289034
White273243
Daviess270474
Jefferson263338
Decatur247683
Fayette247148
Greene239862
Posey239328
Wells236051
LaGrange228862
Scott225339
Clay222532
Randolph213548
Jennings198936
Sullivan192333
Spencer191321
Washington186423
Fountain184027
Starke175443
Jay167623
Owen165737
Fulton164030
Orange159534
Carroll158015
Rush155118
Perry154229
Vermillion149134
Franklin148333
Tipton132332
Parke13078
Pike116926
Blackford111022
Pulaski97037
Newton90921
Brown88035
Benton86610
Crawford7999
Martin73713
Warren6817
Switzerland6615
Union6287
Ohio4907
Unassigned0376

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events