The US Economy at the Q3 of 2017 to Grow Higher than Expectation

Within the third quarter of 2017, some areas in the US were sequentially hit by two hurricanes, i.e. Harvey and Irma. The hurricanes undermined hundred of thousand residences in Texas and Florida. The estimation of economic gross losses in Texas and Florida could reach $ 111 billion and $ 52 billion, respectively. The impact of the hurricanes was predicted to slow the US economic growth in Q3 of 2017.

Surprisingly, the earlier prediction was not proven. The US economic growth remains at 3 percent annual rate in Q3 2017. The increased in inventory investment and smaller trade deficit is able to offset the decline in consumer spending and construction. The consumer spending showed a slowdown from 3.3 percent at the second quarter 2017 to 2.4 percent at the third quarter 2017 in response to the hurricane disaster. The exports increased at a 2.3 percent rate in the third quarter 2017, while imports fell at 0.8 percent pace. It reduced the trade deficit of the US.

Since 2016, it was the first time the US recorded the economic growth at 3 percent annually for the second times in a row. President Trump pays considerably attention for the 3 percent economic growth. President Trump wants big tax cuts and fewer regulations to underpin annual GDP growth to 3 percent. If the target of the GDP growth can be met, the labor market will be increasing. It implies a decline in the unemployment rate.

 To sum up, the US economic growth is a good sign for the global economy. It shows that the global economy is in recovery process after financial crisis in 2008. Other countries should be able to take advantage from this sign by improving their competitiveness to compete at the global market.