U.S. economy maintains fast pace in Q3

Initial estimates suggest that the U.S. economy grew by 3.0% (annualised) in Q3 2017. Therefore, despite the problems caused by several huge hurricanes, the impetus from the previous quarter was more or less maintained, with visible signs of a slowdown kept at bay. These figures do not give the impression that urgent fiscal support measures are needed in order for the USA to maintain its robust economic growth. Nevertheless, reasonably strong investment activity in the field of equipment and machinery looks to have benefited from the expectation of tax cuts. Intense discussions are being held at political level with the aim of introducing tax cuts this year and thus realising a key manifesto pledge.

Overall, the most recent GDP data comes as no surprise. Quite the opposite, in fact, it has simply served to confirm the pretty positive picture emerging from surveys over the past few months. In this way, the ISM’s industrial climate index is at a 13-year high at the moment, while surveys from the service sector reveal a similarly positive picture. The U.S. economy looks set to maintain its robust growth pace over the coming quarters too. We are forecasting an unchanged GDP growth value of 2.2% for 2017 and 2.5% for 2018.

Once again, the most significant contribution to growth in the third quarter was provided by private consumption. The fact that this value was “only” 1.6%, and therefore well below the previous quarter, can ultimately be blamed on weather-related hazards, which occasionally affect consumers.

It is striking that investments supplied an even stronger growth impetus than in the previous quarter. The underlying cause here is certainly the fact that companies have been stockpiling rather
substantially. Should these reserves be depleted in the current quarter or those to come, there would be corresponding negative growth effects. However, it is even more pleasing that investments in equipment remained at a high level, again contributing 0.5 percentage points to economic growth. The weak development in residential and commercial construction projects had already been anticipated, but can only partially be explained by the temporary standstill at numerous construction sites. In terms of commercial real estate investments outside of the residential sector, more restrictive
lending standards may well have had a dampening effect.

As was the case in both of the previous quarters, the public sector did not put the brakes on macroeconomic growth to any great extent. Foreign trade, however, made a positive contribution for the third quarter in a row. On account of declining imports, the highest growth value since the end of 2013, at +0.4 percentage points, was even recorded here.

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