Monthly GDP rose 0.3% in August following a flat reading in July that was revised up one-tenth. The increase in August reflected positive contributions from nonfarm inventory investment and net exports that were partially offset by a negative contribution from domestic final sales. The level of GDP in August was 3.8% above the second-quarter average at an annual rate, indicating the US economy was benefiting from solid momentum prior to Hurricanes Harvey and Irma. Our latest forecast of 2.7% GDP growth in the third quarter assumes a 0.5% (monthly rate) decline in September, reflecting our assumptions for the effects of the hurricanes. Click here for more information on MA’s Monthly GDP measure.
Monthly GDP slipped 0.1% in July following robust increases over the prior two months. The small decrease in July reflected estimated declines in nonfarm inventory investment and net exports that were nearly offset by a solid increase in PCE and smaller increases elsewhere in domestic final sales. The level of GDP in July was 2.4% above the second-quarter average at an annual rate. Implicit in our latest forecast of 3.4% GDP growth in Q3 are increases in monthly GDP in August and September of 0.2% to 0.3% per month (not annualized). Click here for more information on MA’s Monthly GDP measure.