U.S. Drought May Cut GDP by 1 Percentage Point, Deutsche Says

The U.S. drought will reduce economic growth by as much as one percentage point this year after inventories of farm goods dropped, said Joseph LaVorgna, the chief U.S. economist at Deutsche Bank Securities Inc.

The worst drought in more than 50 years scorched U.S. corn, soybean and wheat crops in July and August, cutting production. As stockpiles were drawn down to meet demand for grains and oilseeds, the value of farm inventories fell $20 billion last quarter following an $8 billion drop the prior three months, LaVorgna said in a note.