Tags: hurricanes | economy | growth | storms

Economists: Hurricanes Made Hardly a Dent in US Growth

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Saturday, 21 October 2017 10:09 AM

Economists are coming full circle on their view of the U.S. economy’s performance last quarter. After cutting growth estimates in early September in anticipation of extensive damage from hurricanes Harvey and Irma, they’ve turned more optimistic as recent data have been fairly decent.

Michael Gapen, chief U.S. economist at Barclays Plc, raised his forecast to 2.5 percent, returning it to where it was entering the quarter and up from his prior estimate of 1.5 percent, according to a note Friday. He projects a decline in residential investment, while consumer spending, the biggest part of the economy, got a boost from a rebound in durables consumption. Automobile-industry data showed a bounceback in purchases last month as Americans replaced damaged vehicles.

At Deutsche Bank, economists Brett Ryan and Matthew Luzzetti lifted their growth forecast to 2.7 percent from 2 percent, according to their note Friday. The biggest hit from the hurricanes will show up in investment in structures, which probably fell an annualized 5 percent in the third quarter after rising 7 percent in the second quarter, they wrote.

At the same time, the Barclays and Deutsche Bank economists trimmed fourth-quarter estimates. That’s hardly surprising: since they expect the storms-related drag was smaller, the rebuilding-related boost will also be smaller.

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Economists are coming full circle on their view of the U.S. economy's performance last quarter.
hurricanes, economy, growth, storms
208
2017-09-21
Saturday, 21 October 2017 10:09 AM
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