US Economy Strong in Q-4

US Economy Strong in Q-4

US Economy Strong in Q-4

Consumer spending on goods also saw its biggest Quarterly bounce in more than 11 years after an upward revision to 7.8% growth.

The US economy grew significantly faster at the end of Y 2017 than previously reported, with revised data showing stronger consumer spending and business investment, the government reported Wednesday.

GDP grew 2.9% in Q-4, 0.4 pts higher than the prior estimate, the Commerce Department said. That rate was significantly faster growth than analysts expected.

The strong result for the October-December frame did not take into account December’s sweeping $1.5-T tax cuts, which economists say will boost growth near term.

The 3rd and final estimate of economic growth, based on a fuller set of data, was a tad off of President Donald Trump’s target of 3% annual growth.

But for the full year the growth rate was unchanged at 2.3%, faster than the 1.5% seen in Y 2016.

The Trump Administration is counting on an acceleration of growth to pay for the December tax cuts, which are expected to swell the budget deficit and add to the mounting US sovereign debt.

The upward bump in the Q-4 GDP estimate came from higher consumer spending on transportation, higher wholesale business inventories and updated statistical adjustments to account for seasonal factors, according to the Commerce Department.

The higher consumer spending on transportation saw US services grow by 2.3% in the Quarter from the prior estimate and the fastest expansion in seven years.

Consumer spending on goods also saw its biggest Quarterly bounce in more than 11 years after an upward revision to 7.8% growth.

Despite the accelerating economic growth, corporate profits were flat in the Quarter, falling 0.1% after the prior Quarter’s $90.2-B increase.

The financial sector saw a small decrease but the non-financial sector experienced a $19.4-B increase for the Quarter.

Profits for Y 2017 were up $91.2-B after the $44-B decline in Y 2016, the final year of the Hussein Obama Administration.

The December tax cuts imposed a one-time repatriation tax on foreign earnings, recorded as a $250 billion quarterly capital transfer from businesses to the federal government, according to the Commerce Department.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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