The British pound has recorded slight gains on Thursday, erasing the losses which marked the Wednesday session. In North American trade, GBP/USD is trading at 1.3430, up 0.31% on the day. On the release front, there were no major British releases. In the US, GDP expanded 3.1%, beating the forecast of 3.0%. Unemployment claims jumped to 272 thousand, higher than the estimate of 269 thousand. On Friday, the US releases Personal Spending and UoM Consumer Sentiment.
The US economy continues to hum in 2017, as Final GDP for the second quarter posted an impressive gain of 3.1%. This figure was revised upwards from the second estimate of 3.0% in August. However, September and third quarter economic numbers could soften, due to the damage caused by hurricanes Harvey and Irma, which caused a slowdown in economic activity. The recent hurricanes have impacted on the labor market, pushing unemployment numbers higher. Still, the labor market remains strong, as underscored by unemployment rolls which have remained below the 300,000 level.
Donald Trump’s plans to reform health care appear dead-upon-arrival, so the US president has now set his sights on tax reform, another key campaign platform. On Wednesday, Trump proposed a major overhaul of the US tax code, which includes reducing the corporate tax rate to 20 percent, as well as 25 percent tax rate for small businesses, such as partnerships. Like other Trump proposals, the tax plan was sketchy on details, including how the tax plan would be paid for. With Democrats and some Republicans wary of Trump, it’s likely that tax reform will face a stiff battle in Congress.
