Revised Gross Domestic Product Third Quarter 2017

Economic output in America from July through September 2017 was even better than first counted.  With more complete data collected, the Bureau of Economic Analysis now estimates gross domestic product (GDP) grew 3.3 percent on an inflation-adjusted annualized basis during the third quarter of this year, upwardly revised from 3.0 percent in the earliest estimate.  Output improved by the fastest pace since the 5.2 percent acceleration during third quarter 2014.

Business and government spending led the upward revision.  Firms invested more in equipment and intellectual property than first counted.  Additionally, residential investment was upwardly revised, but this was offset by a downward revision to nonresidential structures.  Federal government outlays were greater than the earlier estimate suggested, while state and local expenses contracted less than first thought, also adding to the revision.

America’s output improved in the third-quarter 2017.  It also appears to have expanded in the fourth-quarter, and forward-looking indicators suggest the current expansion will continue.  Coincident indicators like retail sales and the Chicago Fed’s National Activity Index suggest growth continues in the current quarter.  Looking ahead, the Conference Board’s Leading Economic Index implies even greater output to start 2018.  As far as Atlas can tell, our nation’s economy remains in the virtuous portion of the business cycle.  Barring a substantial negative surprise in the employment data this Friday, America’s economic strength should allow the Federal Reserve to raise the overnight lending rate banks charge each other when the Federal Open Market Committee’s meeting ends a week from today.