US economy grew at a brisk 4.1 percent rate last quarter

31 July, 2018, 17:48 | Author: Diane Mills
  • Workers at the Hollywood Bed Frame Company attend an event to mark the company's upcoming expansion which will double the manufacturer's workforce adding 100 new local jobs at the company's factory in Commerce California seven miles (11

Those gains would result from slashing the US trade deficit "in half", Trump said.

According to the report released by the Bureau of Economic Analysis (BEA), strong consumer and business spending, as well as a surge in exports buoyed the economic growth in the second quarter.

The commerce department reported on Friday that the GDP posted its best showing since a 4.9 per cent gain in the third quarter of 2014.

President Trump has said he wants to see GDP growth rise to 3% or more for 2018.

Friday's powerful gross domestic product report adds to the evidence that President Trump and his economic team have turned the world's largest economy from a stale and stagnant one to an empowering and uplifting machine.

The latest growth number is twice what it was in the first quarter.

But forecasters cautioned that the April-June pace was due mainly, though not entirely, to temporary factors. The rest of the year is likely to see good, but with slower growth of around three per cent.

Economists' forecasts for second-quarter GDP, the value of all goods and services produced in the nation, ranged from 3 percent to 5 percent.

Bankrate.com's Hamrick said 3 percent growth "is worth celebrating". The economy will this year be supported by a US$1.5 trillion tax cut package and increased government spending in the last quarter.

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Second quarter growth was the best in almost four years, at 4.1 percent, but market reaction was muted as the number missed some of the loftier 5 percent plus forecasts. That was about a point higher than forecast by economists, but first quarter spending was revised down to just a half percent from 0.9 percent.

The U.S. economy likely grew at its fastest pace in four years in the second quarter as consumers boosted spending and farmers rushed shipments of soybeans to China to beat retaliatory trade tariffs before they took effect in early July.

As expected, the consumer drove the economy in the second quarter, but at a much higher pace than expected, with consumption at 4 percent.

Trump boasted the biggest takeaway is that the USA deficit dropped by more than $50 billion.

After stripping out the volatile categories of trade, inventories and government spending, sales to private domestic purchasers rose at an annual rate of 4.3 per cent. As a result, inventories were a drag on GDP growth, subtracting 1.0 percentage point after adding 0.27 percentage point in the first quarter.

Economists surveyed by The Wall Street Journal expected a 4.4 per cent growth rate. The growth rate of new orders was above 25%.

"This morning's data confirms that growth has accelerated and that inflation is running close to the target", the report said.

While Friday's report showed the USA economy accelerating, the gains were in line with analyst forecasts - and were not out of proportion with some quarters in previous years.

The current expansion, which began in June 2009 and is now the second longest in history, has also been the weakest. The GDP revisions didn't change that narrative.

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