The U.S. economy is on track to grow at a 3.6 percent annualized rate in the third quarter on data that showed domestic housing starts unexpectedly rose to a five-month high in July, the Atlanta Federal Reserve’s GDP Now forecast model showed on Tuesday.
The latest third-quarter GDP estimate was higher than the 3.5 percent figure calculated last Friday, the Atlanta Fed said on its website.
U.S. home builders increased their groundbreaking last month by 2.1 percent to a seasonally adjusted annual rate of 1.2 million units, the strongest level since February, the Commerce Department said on Tuesday. June’s starts were largely unchanged at a 1.19 million-unit rate.
Economists polled by Reuters had forecast housing starts slipping to a 1.18 million-unit pace in July.
As a result of the surprise increase in housing starts, the Atlanta Fed’s forecast model raised its estimate on third-quarter residential investment growth to 2.4 percent from 0.4 percent.
(Reporting by Richard Leong; Editing by Chizu Nomiyama)
Original Article: http://www.reuters.com/article/us-usa-economy-atlantafed-idUSKCN10R1Q9