The U.S. economy expanded at an annual rate of 3 percent during the third quarter of 2017, according to ABC's analysis of gross domestic product (GDP) data released by the Bureau of Economic Analysis. Nonresidential fixed investment, a category of GDP associated with nonresidential construction activity, also contributed to growth as it expanded at an annual rate of 3.9 percent.
The third quarter's overall performance follows a second quarter during which the economy expanded at roughly the same annual rate. The back-to-back expansion represents the largest gains in two consecutive quarters since 2014. A 2.4-percent increase in consumer spending buoyed third-quarter growth, while nonresidential fixed investment's growth primarily was driven by investment in equipment and intellectual property, as opposed to structures. It also was likely boosted by the major hurricanes that hit parts of the U.S. during the quarter, which served to increase inventory accumulation.
"Construction firms are among the major beneficiaries of the most recent GDP report, which confirms that the U.S. economy enjoys a level of momentum not observed for several years," said ABC Chief Economist Anirban Basu. "Given the stupendous rise in asset values in recent years, many economic actors have become concerned that real estate values could stagnate or decline. That would ultimately result in diminished demand for construction services. However, today's report should diminish the level of concern, at least in the near term, which will help extend the current positive private construction cycle.
"Given the recent performance of financial markets, low unemployment rates, significant number of unfilled job openings, elevated consumer confidence, rising home prices and availability of credit, consumers are well positioned to continue to drive the U.S. economy forward. One of the implications is that fourth-quarter GDP growth is likely to be solid."
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