U.S. economy likely to have grown 2.1 pct in Q3 – Wells Fargo

The U.S. economy had grown softly in the first quarter of this year, expanding at the rate of 1.2 percent and rebounded in the following quarter by expanding 3.1 percent. The almost 2 percentage point jump in the economic growth in the June quarter can be partially attributed to seasonality, especially in personal consumption, owing to rises in disposable personal income of 3.3 percent.

According to a Wells Fargo research report, the U.S. economy is likely to have expanded 2.1 percent in the third quarter and is expected to grow 2.5 percent in the December quarter. This is likely to amount to full year economic growth of 2.1 percent in 2017. Houston and Florida were hit by major storms that impacted job gains and shut down business activity temporarily in significant metro areas.

Consensus expectations are for the U.S. economy to have grown 2.6 percent in the third quarter. The hurricane effects bring increased uncertainty to the third quarter GDP, as some growth drivers were pulled forward and some were pushed back.

“With output rebounding relatively quickly and expectations of some sort of tax cut enacted, we project GDP growth to increase to 2.4 percent in 2018”, added Wells Fargo.

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