The GDP is Showing Surprising Growth. So What?
November 1, 2017
By Michelle Holmes
Trust Investment Officer
The U.S. economy or GDP grew at a faster pace in the third quarter than anticipated. What is GDP and why is it important? Gross Domestic Product (GDP) is the value of all of the finished goods and services produced within a country’s borders. GDP is an indicator of the economic health of a country. It is useful when comparing productivity between countries or comparing current measures within a country with previous years or quarters.
Analysts expected 2.6% growth in GDP for the U.S., however, the economy actually grew 3.0% in the third quarter after increasing 3.1% in the second quarter. This was the fastest six month growth since 2014. The impact of hurricanes Harvey and Irma on growth in the quarter was limited.
Most areas of the economy grew in the third quarter. Government spending and residential investment detracted from growth while businesses and inventories contributed the most to economic growth. Business spent more on equipment this quarter and rebuilt inventories from the depressed levels in 2015. Exports increased this quarter and imports fell adding 0.4% to GDP.
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