USA real GDP rises 2.3% in 2017

Posted January 27, 2018

This was somewhat lower than the consensus estimate of around 3 percent, and it represented an easing from the 3.1 percent and 3.2 percent gains seen in the second and third quarters, respectively.

The growth rate's deceleration relates to a downturn in private inventory investment.

We project strong nominal and real GDP growth momentum in 2018.

In May that year the department said that if the British people voted for Brexit it could push the economy into immediate recession and growth would still be zero by the last three months of 2017. While that is an improvement from the 1.5 percent gain in 2016, it is basically the same as the average 2.2 percent growth rate that the US has seen since the end of the Great Recession.

Howard Archer, chief economic adviser to the EY Item Club, said: "We suspect that relatively lacklustre economic growth will continue to limit domestic price pressures".

The figures do not reflect an anticipated boost to economic activity from massive U.S. tax cuts enacted last month, although preliminary forecasts suggest additional growth may be modest.

Final sales to domestic purchasers - which strip out inventories and trade, the two most volatile components of GDP - grew 4.3 per cent.

But economic growth in Trump's first year as president was the third best in the past five, and experts predicted that, even with the $1.5 trillion tax cut, it would prove hard to achieve much more momentum. Durable and nondurable goods spending were jumped 14.2 percent and 5.2 percent, respectively, for the quarter. Output increased 2.5% in 2017, the most in three years, as American households and companies boosted spending broadly.

"America is open for business, and we are competitive once again", he said.

Since 2004, this will be the first time that the USA economy has enjoyed a growth rate of 3 percent for three consecutive quarters.

For 2018, the International Monetary Fund is forecasting United Kingdom growth at 1.5%, with the organisation previously saying that Brexit uncertainty and the inflation squeeze on household spending power would put the brakes on the United Kingdom economy.

Likewise, federal and state and local government spending increased 3.5 percent and 2.6 percent, respectively, in this report, with government expenditures adding another 0.50 percentage points to top-line growth.

Business equipment investment expanded with a 11.4 percent annualized rate which added 0.62 percentage point to fourth-quarter growth.Housing took a huge upward leap too. That should be a positive for the first quarter of 2018.

Imports, which subtract from GDP growth, increased at their fastest rate in more than seven years, up 13 9 per cent.

"In short, growth was a bit less than generally expected, disappointing hopes for a third consecutive 3%-or-better quarter for the first time since 2005, but the details were stronger than the headline figure", said Jim O'Sullivan of High Frequency Economics.