US Economy sustains growth in the 4th Quarter of 2017
United States economy continued to grow in the fourth quarter. The growth is linked to an increase in business and consumer spending. US economy is on its path to achieve Donald Trump administrations target growth rate of 3 percent per annum.
According to a Reuters poll for the economists, GDP likely rose at a 3 percent annual rate supported by an increase in government outlays and a recoil in the homebuilding investment.
Since 2004, this will be the first time that the US economy has enjoyed a growth rate of 3 percent for three consecutive quarters. The United States Commerce Department is expect to publish its advance fourth quarter Gross Domestic Product estimate by Friday. US economy’s growth path is a part of a coordinated global rebound that incorporates Asia and Euro Zone.
Moreover, the economy has also benefited from Trump’s decision of tax cuts. In December last year the United States congress sanctioned the largest overhaul of tax code in 30 years. Overall economic growth is expected to be at 2.3 percent in 2017. This growth percentage is slightly less than expected because the first quarter of 2017 was sluggish. According to numerous economists, US economy will hit the 3 percent growth mark this year.
Steady economic growth has been complemented by major gains in the stock market swell as a robust labor market. Last year the US unemployment rate to 4.1 percent, which is the lowest in last 17 years. As a result of a decrease in unemployment rate, economists believe that the government can possibly increase the interest rate at a much steady pace than expected. Consumer spending is expected to have risen by more than 3.9 percent in the fourth quarter.
Euler Hermes North America’s chief economist, Dan North said that consumers have shown great confidence in the new administration. Since the elections consumers’ willingness to spend money has risen sharply. A reason for this is an increase in person income. Adding further, Dan said that once consumers’ willingness to spend increases the economy picks up.