Hassett said the plan to slash the corporate tax rate from 35 percent to 20 percent could increase the size of the USA economy by $700 billion, to $1.2 trillion over a decade. It was the strongest two-quarter showing since 2014.
The slowdown was offset by a strong 8.6 percent gain in business investment in equipment and an increase in business rebuilding of inventories, which added 0.7 percentage point to third quarter growth, Friday's report said.
Commerce Secretary Wilbur Ross asserted that Friday's GDP report "proves that President Trump's bold agenda is steadily overcoming the dismal economy inherited from the previous administration". "As the President's tax cut plan is implemented, our entire economy will continue to come roaring back".
The skepticism about Trump's 3 percent was somewhat justified.
"Without the drag from the hurricane, growth would have been around 3.5 percent", he predicted. Many analysts believe annual growth in the current October-December quarter will amount to a rate of around 2.7 percent. Many economists, however, said the number was unrealistic.
Paul Ashworth, chief USA economist at Capital Economics, said: "GDP growth for 2017 as a whole is now tracking at around 2.1% and, assuming we see a modest fiscal stimulus in early 2018, we expect GDP growth to accelerate to 2.5% next year, even after allowing for a more aggressive pace of monetary tightening". The government said that while economic activity ranging from energy refineries in Texas to citrus farming in Florida were hurt by the storms, it could not estimate how much the hurricanes had weakened overall US growth last quarter. In the second quarter, real GDP increased 3.1 percent.The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see Source Data for the Advance Estimate on page 2). Both residential and non-residential structures categories were affected by disruptions related to Hurricanes Harvey and Irma.
Businesses accrued inventories at a $35.8 billion pace for the third quarter in expectation of intense demands.
Other areas of the report showed weakness.
Meanwhile, government spending fell for a third straight quarter, dropping 0.1 percent. Final sales to domestic purchasers, which strip out trade and inventories - the two most volatile components of the GDP calculation - climbed 1.8 percent, the slowest since early 2016, after rising 2.7 percent in prior quarter.
On Thursday, the GOP-controlled House passed a proposed budget that would provide for $1.5 trillion in tax cuts over the next decade. Trump and Republicans are pressing to enact tax cuts that they say will boost expansion.
Democrats have expressed skepticism about that forecast.