Highlights
- US revised second-quarter GDP up 3.0% vs 2.7% rise expected
- The U.S. economy grew faster than initially thought in the second quarter, notching its quickest pace in more than two years.
- There are signs that the momentum was sustained at the start of the third quarter.
The U.S. economy has set a record-breaking gross domestic product or GDP growth during the second quarter of 2017, the fastest in more than two years. It was yet its quickest pace in world history.
More than what economists had expected
The GDP, to present in detail, grew up to three percent as opposed to the 2.7 percent predicted from the economists’ perspective.
During the second quarter in 2017, the GDP grew at this percentage, covering the performance during April, May, and July, and this is said to be more than double the growth seen during the year’s first quarter.
This attained economic growth may be credited to the strong consumer spending during this time, and the robust investments among business people and entrepreneurs. Moreover, it is even better than the growth during the previous quarter.
When the data was launched, predictions for the growth rate also came in for the third quarter. The figures are as high as 3.4 percent in predictions, and job growth was projected to be the top contributor, as private companies sought to add 237,000 more jobs to their payrolls. This was up from 201,000 work opportunities in July.
“Strong growth and a labor market that is near full employment support views the Federal Reserve will announce a plan to start unwinding its $4.2 trillion portfolios of Treasury bonds and mortgage-backed securities next month and increase interest rates in December,” the report added.
Another contribution to this record-breaking second-quarter GDP increase was the great start in the U.S. economy during the beginning of 2017. In the first half of the said year, the economy grew 2.1 percent and also up from last month’s 1.9 percent.
Robust consumer spending
Spending among consumers
To add context to this significant GDP growth, consumer spending was seen as a major contributor. In the U.S., this comprises more than two-thirds of the economy, and it grew 3.3 percent, the fastest within a year. The products that made rounds in the market were cellphones, motor vehicles, utilities, and real estate. Spending accounted the most on fueling the economic performance in that quarter.
Inflation rate
Inflation remained friendly upon consumers. Boosting the economy with consumer spending is one, but inflation was even not volatile during the second quarter but was described as benign. During the quarter, the inflation rate increase was also slowest in more than two years, after the 1.8 increase in the year’s opening.
Business, trade, and investments
Business, trade, and investments must also be applauded. In the corporate world, profits were at record highs, the fastest in almost two years as well. Investors becoming interested in non-residential investments increased at 6.2 percent. Trade was adding two-tenths of its percentage point to this growth.
What does this tell?
For various interests, the U.S economy has always been a huge deal. With the administration of business mogul and now the country’s president Donald Trump, it becomes even more interesting.
Those figures are from 2017, and today in 2020, despite the ups and downs, the economy for this country is generally performing well. However, the COVID-19 pandemic has challenged it despite the potential to develop. During the second quarter of this year, the GDP decreased by 33 percent and also decreased during the first quarter.
Times are different, and from 2017 to 2020, there have been several changes that have transpired. There have been many factors that have led to the trend, and they include the ongoing trade war with China, terrorism in the Middle East, the pandemic, and the upcoming mid-term presidential elections.
According to the New York Times, with the presidential U.S. elections fast approaching, the economy is one of the points of discussion that will take place. Former vice-president Joe Biden is the leading Democrat candidate predicted to challenge the Trump administration.
What will the future be?
Approximately three years after this record-breaking economic achievement, the United States economy is not at a loss. In 2018, the GDP increased by 5.2 percent, with the 2019 GDP pegged at $21.44 trillion. The current year has not ended yet, and there are more turning points to happen.
It wasn’t until the beginning of 2017 that the current administration in the United States started to take over after being sworn into office. Right then, there have been several changes. The future is bright for the economy, and as the world continues to battle the coronavirus pandemic, becoming more open to these economic events will have citizens in good terms with the markets.