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US economy grew at 3 percent rate in July-September quarter

October 27,2017 13:07

In this Friday, Oct. 6, 2017, photo, workers build an apartment and retail complex in Nashville, Tenn. On Friday, Oct. 27, 2017, the Commerce Department issues the first of three estimates of how the U.S. economy performed in the July-September quarter.

At the same time, with a weak dollar making American goods more competitive abroad, international trade contributed positively to output for the third quarter in a row. Imports decreased.
Hurricanes can disrupt an economy in obvious ways — ruining homes, incapacitating infrastructure, and slowing the flow of goods across the country. The Houston metropolitan area is the country’s s fifth largest, accounting for 3 percent of national economic output, and the severe flooding brought on by Hurricane Harvey had an immediate impact on employment. The country’s economy shed 33,000 jobs in September, the first monthly drop in seven years.
But after the negative shock dissipates, the recovery from extreme weather events can help the economy by creating new reasons for consumer spending, which represents roughly 70 percent of national output. After the damage is done, people must often rebuild their homes or replace their cars, an effect that began to show up in the last quarter and will most likely continue through the end of the year.
“If you don’t go out to eat during a hurricane, maybe you bought plywood for your house,” said Robert Dye, chief economist at Comerica Bank. “If you have the insurance and support, that tends to be a stimulus to the economy.”
Hurricanes Harvey and Irma, for example, left 600,000 to one million vehicles needing replacement, according to Cox Automotive, and Americans rushed to dealerships to recoup what they had lost. Car sales spiked in September, reaching their highest level since 2005.
This is the government’s first estimate of economic output for the quarter, and the figure will be revised twice. It can be hard to accurately measure the full effect of a natural disaster immediately after it occurs, and so these numbers may swing up or down when the department revisits the period.
The American economy had been performing considerably better this year than in 2016, when it grew at a halting 1.5 percent. President Trump zeroed in on economic growth during his campaign and in office, promising to reach heights that eluded his predecessor.
“On a yearly basis, as you know, the last administration, during an eight-year period, never hit 3 percent,” Mr. Trump said during a speech in Missouri in August. Touting a strong quarter in the spring, when growth hit 3.1 percent, Mr. Trump suggested that “we’re really on our way” to sustaining that speed year-round.

The United States has been a pace setter among developed economies, but Europe is no longer a laggard.

Annual rate of change in G.D.P.

European Union

But economists said the good news didn’t have much to do with recent political changes. Things have been looking up, economically, for much of the world, which is enjoying a rare moment of widespread expansion. The International Monetary Fund upgraded its forecast for the pace of world growth twice this year.
“This is happening globally — there isn’t a single major economy that is in recession,” said Mr. Zandi, the Moody’s economist. “This was an economic train that left the station a year or two ago. Regardless of who was president, we would have seen this.”

United States Economy,Hurricane Harvey (2017),Consumer Behavior,Gross National Product (GNP)

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