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Economic data is the lifeblood of the financial markets. It’s analyzed, dissected, prodded and poked to assess the strength, and more importantly, the direction of the U.S. economy.

Much of the recent economic data has been skewed by the impact of hurricanes Harvey and Irma, which decimated the southeastern U.S. in late August and early September. Consequently, many of the key benchmarks that report the condition of the U.S. economy have ranged from good to bad to ugly. It’s impossible to identify the exact financial impact from the hurricanes. With factories shut down, businesses and homes wiped out and millions of people displaced, we can only estimate the economic damage.

With the varied, and often conflicting, headlines being reported, what exactly is the current state of the U.S. economy?

The key indicator of the health of the U.S. economy is the Gross Domestic Product report, or GDP, released each month by the U.S. Department of Commerce. GDP represents the total dollar value of goods and services produced in the U.S. The significance of the latest report is that it provides the first overarching look at economic growth in the third quarter – the July through September timeframe that incorporates the hurricanes’ impact.

In the third quarter, the economy grew at an annualized rate of 3 percent, slightly below the second quarter rate of 3.1 percent, but well above the consensus estimate of 2.5 percent. It was the first time the U.S. economy had back-to-back quarters of 3 percent growth since mid-2014.

Overall, the report is positive. But the financial markets realize the economy may not be as strong as the headline 3 percent growth indicates. The biggest component of GDP is Personal Consumption Expenditures, or PCE, the consumer purchases of durable and non-durable goods and services. Consumer spending accounts for two-thirds of all U.S. economic activity and is the key driver of the American economy. In the third quarter, PCE increased at an annual rate of 2.4 percent from the prior quarter, slightly below the second quarter rate of 3.3 percent. Business investment, the big-ticket purchases of buildings and equipment, increased by 3.9 percent, well below the second quarter’s rate of 6.7 percent.

Nonetheless, it still shows a respectable level of hurricane-impacted spending by consumers and businesses. But embedded in the 3 percent growth rate was a massive $35.8 billion increase in business inventories — goods produced in anticipation of strong demand, but not yet sold. The increase in inventories added a hefty 0.73 percentage points to GDP. In other words, excluding the inventory buildup, the economy grew at a rate of just 2.27 percent in the third quarter.

Yes, the financial markets might be overly critical in downplaying the latest economic data. But they are forced to somehow quantify, for better or worse, the hurricanes’ financial impact on the economy where no such data exists.

Despite the inconsistent economic data over the past few months, the general consensus is for an improving economic landscape. Since January, the economy is growing at an average pace of 2.43 percent, above the 8-year average of 2.1 percent. Also, the post-hurricane recovery efforts should provide a sizable boost to fourth quarter growth. Consumer spending has stabilized and looks for a moderate, yet continued resurgence. The Consumer Confidence Index, a key measure of consumer optimism on the state of the economy, just reached its highest level since December 2000. For the Federal Reserve, it remains on track for a December rate hike, its third of the year and fourth since December 2016.

A 3 percent economic growth rate is often considered a rough gauge of a healthy economy. Unfortunately, the U.S. economy hasn’t had a full year of 3 percent growth since 2005. Even with the hurricane-battered results of the third quarter, the markets are hoping the expected growth in the fourth quarter will serve as that much-needed springboard into 2018.

Mark Grywacheski spent more than 14 years as a professional trader in Chicago, where he served on various committees for multiple global financial exchanges and as an industry Arbitrator for more than a decade. He is an expert in financial markets and economic analysis and is an investment advisor with Quad-Cities Investment Group, Davenport.

Disclaimer: Opinions expressed herein are subject to change without notice. Any prices or quotations contained herein are indicative only and do not constitute an offer to buy or sell any securities at any given price. Information has been obtained from sources considered reliable, but we do not guarantee that the material presented is accurate or that it provides a complete description of the securities, markets or developments mentioned. Quad-Cities Investment Group LLC is a registered investment advisor with the U.S. Securities Exchange Commission.