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US GDP jumped higher again in Q3 despite severe weather

US GDP jumped higher again in Q3 despite severe weather

UNITED STATES — The 3 percent gain in Q3 GDP marks a second consecutive quarter of growth well-above the economy’s long-run ‘potential’ growth rate, reported Nathan Janzen, senior economist at RBC.

He said, “Alongside another drop in the unemployment rate in Q3, that should provide further reassurance that output continues to grow at a pace that is strong enough to absorb any remaining excess capacity in the economy. The composition of growth was also relatively favorable. Household spending growth slowed but probably in part due to the hurricanes and business investment rose solidly for a third straight quarter despite the severe weather. Business investment was largely a missing component of growth in 2016, so the emergence of a more ’balanced’ growth profile in 2017 — less dependent on household spending alone — has been a positive development that appears to be persisting.”

In addition, Janzen reported that inflation pressures have admittedly remained benign, with growth in the core PCE deflator slowing further in Q3. He said, “Inflation also typically lags the economic cycle, though, so an economy that otherwise now looks close to capacity limits continues to suggest that price growth will rise rather than fall going forward. We don’t think the Fed will opt to hike rates following next week’s policy meeting after announcing tapering asset holdings at the last meeting in September. The relatively strong flow of recent data, though, should further strengthen already widely-held expectations that monetary policymakers will raise the fed funds target range by 25 basis points for a third time this year in December.”

Source: RBC press release

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About Ronnie Garrett

Ronnie Garrett is the editor in chief of RV Daily Report. She's been a writer/editor for more than 25 years, working in law enforcement, aviation, supply chain and now the RV industry. She's not a stranger to RVs, however. She grew up camping, and still camps as many weekends as she can every year.

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