USA growth in Q2 upgraded to 3%

USA growth in Q2 upgraded to 3%

US President Donald Trump has said he wants to see the US economy increase by 3% for 2017.

The economy picked up from a 1.2% rate in the first quarter.

"If not for the uncertain impact of Harvey, we would be tempted to raise our current 2.4% estimate for Q3 GDP growth", he says in an economics update.

"As is the case with most natural disasters, the impact on the US economy will likely be both small and mixed as the early disruption to production and potential spikes in gas prices fade and are replaced by the positive impact of fix and reconstruction efforts", said David Kelly, chief global strategist at JPMorgan Funds.

The revision to GDP is the second strong piece of economic news out on Wednesday. Most promisingly, equipment spending soared in the latest data to its fastest pace since the third quarter of 2015, up 8.8 percent, with 6.2 percent growth in structures spending.

During last year's campaign, Trump pledged to boost economic growth to 4 per cent or better.

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"For the first time since the Great Recession ended in mid-2009, the economy is not facing any significant headwinds", Zandi said. In the first quarter, real GDP increased 1.2 percent.The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. American consumers remain in the driver's seat in the current expansion, backed by a strong job market, contained inflation and low borrowing costs.

Businesses helped to carry the economy in the second quarter, in part buoyed by a rebound in corporate profits. Treasury Secretary Steven Mnuchin has said it will take up to two years for the economy to sustain this pace, while some economists have said the target is too high.

Nonfarm inventories rose by 0.15%, compared with a drop of 1.59% in the prior quarter, while exports rose by just 0.45%, compared with an increase of 0.85% in the first quarter.

US Treasury Secretary Steven Mnuchin has previously stated that GDP growth of 3 percent would be very achievable for the Trump administration though tax and regulatory reforms. Trump's challenge is to make strong growth the norm, not a blip for a quarter or two.

That is different from the United Kingdom, which publishes quarter-on-quarter growth figures.

The acceleration in real GDP in the second quarter primarily reflected upturns in private inventory investment and federal government spending and an acceleration in PCE that were partly offset by downturns in residential fixed investment and state and local government spending and a deceleration in exports.

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