#560- Economy Grows in the Third QuarterPosted on
A little good news to start the last month of 2015…
Economy Grows in the Third Quarter, with Manufacturing Production Up, Too
Agence France-Presse, Nov 24, 2015
The U.S. economy grew more strongly than first thought in the third quarter on higher investments in businesses and housing that offset a bit less momentum in key consumer spending.
In the July to September quarter, gross domestic product expanded at a 2.1% annual pace, according to the Commerce Department. GDP growth in the quarter was initially estimated at 1.5%, and though now seen stronger, it still marked a slowdown from the robust 3.9% expansion in the second quarter.
Meanwhile, in the Manufacturing Forecast
The manufacturing sector is expected to increase production through 2017, according to a new forecast from the MAPI Foundation. Strong consumer demand spurred by job growth is the anticipated major driver.
The MAPI Foundation quarterly report, which was also released Tuesday, predicts that inflation-adjusted gross domestic product will expand 2.9% in 2016, 2.7% in 2017 and 2.5% in 2018, both on par with the previous quarterly forecast. Manufacturing production is also expected to surpass the 2015 growth rate of 1.8%, with the report calling for 2.6% growth in 2016, 3.0% in 2017 and 2.8% in 2018.
“There are strong deflationary pressures that are spreading, such as lower global energy prices, China’s economic restructuring, and a forecast for slow price recovery in commodities,” MAPI Foundation chief economist Daniel J. Meckstroth said. “Also, we are not anticipating negative shocks such as the harsh winter and California port strikes to repeat themselves in 2016. Strong domestic demand buffers the United States from the rest of the world, where global manufacturing continues to slow.
“We expect a modest acceleration in manufacturing growth over the next two years before it decelerates. Consistently strong job growth is driving the economy. New workers mean more income, which translates into more spending.”
Meckstroth expects the strong dollar to reduce GDP growth slightly each of the next three years, with a negative effect on inventories and net exports.
With the positive forecast for the manufacturing sector for the next two years, we are encouraged and optimistic about the future