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Published: Sun, October 01, 2017
Economy | By Melissa Porter

Farm Stockpiles Jumpstart US Economy to 3.1% Growth in Q2

Farm Stockpiles Jumpstart US Economy to 3.1% Growth in Q2

U.S. economic growth in the second quarter was stronger than previously thought, according to the Commerce Department's third estimate of gross domestic product released Thursday.

Services was the only sector to show growth in the three months to June, with agriculture, production and construction all declining.

"For now, we maintain our forecast that GDP increased by 0.3% quarter-on-quarter in Q3, although the risks now lie slightly to the downside", he added.

Although the quarterly growth was confirmed at 0.3 percent, the composition was more encouraging, Paul Hollingsworth, an economist at Capital Economics, said.

Growth during the last quarter was faster than any quarter since the 2015 first quarter and followed a growth rate of 1.2% during the quarter from January through March.

The revised figure was the government's third and final look at GDP for the April-June period, and left GDP rising at an average 2 percent pace over the first six months of the year. This upward revision of 0.1% from the previous 3% reported in August reflected an inventory investment increase.

Within the second quarter there were encouraging signs, with quarterly growth in household spending revised up to 0.2% from 0.1%, and business investment to 0.5% from 0%.

In the second quarter, net trade provided the largest contribution to growth at 0.4 percentage points.

National Accounts data from the ONS revealed the household saving ratio picked up to 5.4% in the second quarter, the highest since the third quarter of a year ago, while the ratio for the first quarter was revised to 3.8% from 1.7% as part of a methodology change that saw the household saving ratio revised up on average by 0.9 percentage points between 1997 and 2016.

Separate figures from the ONS indicated that the UK's key service sector contracted by 0.2% in July.

The figures suggest British consumer spending could continue to remain resilient, with households having enough in their tank to keep spending up without upping their debt.

According to the report, experts expect GDP growth in 2019 by 3.6% with inflation being 5.9% and in 2020 some 4% with inflation standing at 5%. Overall orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, rebounded 1.7 percent last month as bookings for transportation equipment jumped 4.9 percent.

The ONS also said the current-account deficit widened to 23.2 billion pounds in the second quarter.

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