Drought Might Have Big Effect on GDP

Agriculture represents only about 1 percent of the U.S. economy, but major events in farm country can have a noticeable effect on national output. This summer’s drought certainly qualifies as a major event, and Macroeconomic Advisers says it will knock as much as 0.6 percentage point off growth in gross domestic product for the rest of this year.

GDP — the total value of all the goods and services produced in the U.S. — grew at a rate of just 1.7 percent in the second quarter, and Macroeconomic Advisers had been predicting about 2 percent growth for the rest of this year, so a 0.6 percentage point effect is a big deal.

Read more on St. Louis Post Dispatch.

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