U.S. Outlook: Q3 GDP report preview

Scott Anderson
Chief Economist

There is little doubt that hurricanes Harvey and Irma will have a negative impact on Q3 GDP growth when it is released next Friday.

Graph showing recent drop in housing starts.We estimate the combined hit to third quarter GDP could be above one full percentage point worth of Q3 GDP growth.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Oct. 20.

Key observations:

  • Lost personal income and spending should be highly visible in the real consumer spending measure, where we expect Q3 growth to slow to a 2.2% pace from 3.3% in the second quarter.
  • The drop in housing starts for September suggests more than a 7.0% drop in residential investment in the third quarter, shaving at least 0.3 percentage points off of GDP growth alone.
  • The real takeaway from the report will be how resilient overall U.S. GDP growth continues to be.
  • We estimate Q3 GDP growth at around 2.5% on an annualized basis, just a notch lower than the 3.1% pace recorded in the second quarter.

Read my full report.

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