The economy of the United States, to a great surprise maintained a steady pace of growth in the third quarter of the year. The main reason behind this is the increase in the inventory investment and a smaller deficit in trade to offset a slowdown that was related to the hurricanes in the consumer spending and a decline in the rate of construction. The gross domestic product at an annual rate of three percent in the period of July to September after expanding at a rate of 3.1 percent in the second quarter as per the statement of the commerce department that was released on Friday. The department said that it was not possible to estimate the overall impact of the two killer hurricanes Harvey and Irma on gross domestic product of the third quarter. The preliminary estimates revealed that the two storms one after the other had resulted in losses of 121 billion dollars in privately owned fixed assets and about 10.4 billion dollars in fixed assets owned by the government.
The killer hurricanes Harvey and Irma struck different parts of Texas and Florida in late August and early September. Hurricane Maria which had destroyed infrastructure in Puerto Rico and the Virgin Islands actually had no impact on the growth of gross domestic product in the third quarter as the islands are not included in the national accounts of the United States. The Economists polled by Reuters had previously forecasted that the economy would be growing at a 2.5 percent pace in the third quarter. Excluding the inventory investment, the economy grew at a 2.3 percent rate, slowing down from the second 2.9 percent rate in the second quarter.
The labor market, retail sales and industrial production data in post hurricane season is already showing a good acceleration in underlying economic activity and the report on Friday will probably have no impact on monetary policy in the near term. Janet Yellen the chairman of the Federal Reserve previously issued a note of caution in the previous month that the economic growth in the third quarter will be at a low due to the severe disruptions caused by the two killer hurricanes back to back. The central bank of the United States is expected to increase its interest rates for a third time this year in the month of December. The recovery in the economy since the recession of 2007-2009 is now in its eighth year and is showing little signs of tiredness and constantly going up.