The nations real gross domestic product (GDP) increased at an annual rate of 3.0 percent in the second quarter, according to the "second" estimate released by the Bureau of Economic Analysis on Wednesday. GDP has averaged annual growth rates of just 2.2 percent in this recovery, which is now the third longest in US history.
"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. Under President Barack Obama in 2013 and 2014, quarterly growth occasionally exceeded 3 percent.
Last quarter's rise was the slowest in more than two years and followed a 1.8 percent rate of increase in the first quarter. Lower residential fixed investment and lower spending at the state and local government levels partially offset the gains. The average of real GDP and real GDI, a supplemental measure of US economic activity that equally weights GDP and GDI, increased 3.0 percent in the second quarter, compared with an increase of 2.0 percent in the first quarter.
It will take more than one quarter's data for the White House or congressional Republicans to be able to claim credit for lifting the economy's growth trajectory.
Hurricane Harvey's pummeling of major population and production centers in Texas and Louisiana will likely constrain growth in the third quarter. Volatility has returned, geopolitical tension is rising, and the devastation of Harvey has many observers questioning what's in store for the future, particularly as the USA dollar declines.
Mr Trump plans tax cuts, deregulation and infrastructure spending but the administration has yet to pass any economic legislation amid gridlock on Capitol Hill. That's still well under the Federal Reserve's desired inflation rate in a range of 2.0% to 2.5%.
Real gross domestic income (GDI) growth for the second quarter came in at 2.9%.
The Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, increased at a 0.9 percent rate as previously reported.
Investment on nonresidential structures increased at a 6.2 percent pace, rather than the previously reported 4.9 percent rate.
Consumer spending was the main engine for the strength in the second quarter, rising a revised 3.3% in the second quarter.