The U.S. economy appears to be strengthening with a new federal report Friday showing the growth rate has more than doubled since earlier this year.
Gross Domestic Product (GDP) tracks the total dollar value of all goods and services produced over a specific time period. The GDP only increased by 1.2 percent during the first quarter of this year. The Bureau of Economic Analysis (BEA) found in its advance estimates for quarter two that the growth rate improved to 2.6 percent.
“Real gross domestic product increased at an annual rate of 2.6 percent in the second quarter of 2017,” the report states. “In the first quarter, real GDP increased 1.2 percent.”
The increase in GDP is based on consumption expenditures, nonresidential fixed investment, exports, and federal government spending. Those areas were partly offset by negative contributions from private residential fixed investment, private inventory investment, and state and local government spending.
President Donald Trump has promised to help both the businesses community and workers. His plan to decrease regulations and lower taxes has prompted optimism in the economy. The National Association of Manufacturers (NAM) notes better growth is possible if the administration enacts the right policies.
“For the year as a whole, I am currently predicting real GDP growth of 2.2 percent, with 2.6 percent growth for the current third quarter,” NAM chief economist Chad Moutray wrote. “I continue to believe that there is upward potential in the forecast, especially for 2018, if pro-growth policies are enacted.”
The BEA report reflects the advanced findings for the second quarter of this year. The report is based on source data that is incomplete or subject to further revisions. The finalized second quarter report is scheduled to be released on September 28.
The GDP growth rate has struggled since the last recession nearly a decade ago. It started to improve in recent years but was typically stuck around one percent. It jumped in the third quarter of last year to 3.5 percent but fell back closer to one percent in the following two quarters.