The U.S. economy expanded at a faster pace than expected, weathering the effects of hurricanes Harvey and Irma.
Gross domestic product growth hit 3 percent in the July to September quarter for the first time in consecutive quarters since 2014, the Commerce Department reported on Friday.
The latest figure follows a 3.1 percent rate of growth in the April–June period and a much weaker 1.2 percent pace in the first three months of the year.
{mosads}Three years ago, the economy posted gains of 4.6 percent and 5.2 percent in the second and third quarters of 2014.
The Trump administration, along with Republican lawmakers on Capitol Hill, are selling tax reform as an avenue to growth above a 3 percent clip.
On Thursday, the House approved a budget that paves the way for an overhaul of the tax code.
House Ways and Means Committee Chairman Kevin Brady (R-Texas) said the GDP report “reinforces the resilience of the American people.”
“With the budget we passed yesterday, Congress now has the best opportunity in a generation to continue this growth through bold, transformational tax reform,” he said.
The Ways and Means Committee next week will introduce tax legislation, with a mark up scheduled for Nov. 6 and a plan to complete the process this year.
“Working with President Trump and the Senate, we will deliver on our tax reform promise this year, ushering in a new era of growth for the American people,” Brady said.
Despite the faster growth, the economy on average has expanded at only a 2.3 percent rate over the past four quarters.
The Commerce Department said that on this first estimate “it is not possible to estimate the overall impact of Hurricanes Harvey and Irma” on third quarter growth.
But Stuart Hoffman, PNC senior economic adviser, estimated that the hurricanes took about 0.5 percentage point off growth, which is expected to be made up in the final quarter of the year.
The government report said the storms disrupted production at facilities such as factories and offices.
Oil and gas extraction and petroleum and petrochemical production in Texas and agricultural production in Florida were affected, the report said.
The storms led to the first job losses in seven years in September. The economy shed 33,000 jobs last month. The next round of figures are out in a week and that number could be revised into positive territory.
Consumer spending, which accounts for about 70 percent of the economy, tapered to 2.4 percent from 3.3 percent in the second quarter, adding 1.6 percentage point to growth.
Sales of cars helped boost spending as those affected by the hurricanes purchased vehicles after many were destroyed in the severe flooding.
Other positives in the reported showed business investment growing at a 8.6 percent rate, adding 0.7 percentage point to the quarter’s growth.
Capital spending was up 3.9 percent, while inventory rebuilding added 0.7 percentage points to growth.
Exports ticked up 2.3 percent while imports fell at a 0.8 percent, which added 0.4 percentage points to growth last quarter.
Weakness in the report was reflected in slower government spending and residential construction, which declined 6 percent, and was probably held back by the hurricanes.