US Second-Quarter GDP Revised Up To 3% From Initial 2

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The trade picture has improved so far in 2017 relative to challenges seen in each of the past two years, with positive contributions to real GDP in both the first and second quarters.

On the stump for an overhaul of the nation's tax system, President Donald Trump on Wednesday said that cutting taxes would "bring back Main Street" and spur the USA economy to a level of growth not seen since the Great Recession.

As a result, the PCE index decelerated to a 1.6% annual pace in the quarter, down from a 2% rate in the first quarter.

GDP increased by about 1.5% in 2016 in the U.S. and by 2.9% in 2015, according to the BEA.

Consumer spending, biggest part of the economy, grew 3.3 percent (estimated 3 percent), most since second quarter of 2016 and revised from 2.8 percent.

The Commerce Department's second estimate of Q2 gross domestic product released Wednesday printed at 3%. The only major component to be downwardly revised was government that dropped 0.3 percent as federal spending gave less lift while state and local spending was more of a drag, noted TD Economics in a research report. Payroll processor ADP said US employers added a seasonally adjusted 237,000 jobs in August, easily topping the Econoday consensus forecast for 185,000. Some are now saying that the devastation from Hurricane Harvey could shave about a half-percentage point off growth this quarter. ADP said 178,000 jobs were created in July. For the year a whole, I am now predicting real GDP growth of 2.2 percent, with 2.8 percent growth for the current third quarter. That was an improvement from the lackluster 1.2 percent rate in the first quarter.

"Underlying domestic demand in the economy is consistent with near three percent growth but the supply-side of the economy is not capable of delivering such a pace of growth at this point", John Ryding, chief economist at RDQ Economics in NY, told CNBC.

Rest of the upward revision was connected to non-residential fixed investment that rose 6.9 percent from the initial estimate of 5.2 percent.

Current-dollar GDP increased 4.0 percent, or $189.0 billion, in the second quarter to a level of $19,246.7 billion. Treasury Secretary Steven Mnuchin has said it will take up to two years for the economy to sustain this pace, while some economists have said the target is too high.

Most experts believe the central bank will raise rates just once more this year, but a faster economy or an increase in wages or inflation could prompt policymakers to move more quickly to tighten monetary policy and shrink the balance sheet in 2018.

Net exports added 0.21 percentage point to growth.

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