PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

GDP Growth Revised Up in Second Quarter 2017

By at 30 August, 2017, 10:14 am

by Raymond J. Keating-

Second quarter real economic growth was stronger than initially reported, as explained in the second estimate from the U.S. Bureau of Economic Analysis released on August 30.

There were two pieces of good news that bumped growth up from an original estimate of 2.6 percent to 3.0 percent. First, personal consumption expenditures moved up from 2.8 percent to 3.3 percent. Second, nonresidential fixed private investment (that is, business investment), saw growth revised from 5.2 percent to 6.9 percent. More investment and a stronger consumer certainly make for some good news.

The only downside in the revisions came on the trade front. The initial second quarter GDP estimate showed the growth in both exports and imports slowing versus the first quarter, and growth on each was ratcheted down a bit more in the revision.

Overall, any upward revision in real GDP is most welcome. And hitting the 3 percent growth mark is nice, considering that real GDP growth has averaged a woeful 2.1 percent throughout this recovery/expansion period.

At the same time, we’ve seen quarters of good growth over the past eight years. The problem has been a lack of sustainability. And sustainable, strong growth will only come when we completely turn around the policy ship in a pro-growth direction, meaning implementing bold tax and regulatory relief and reform, rolling back ObamaCare, restraining the growth in government spending, shifting to sound monetary policy, and reducing governmental barriers to free trade.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP:  The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.

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