U.S. economic growth hits fastest rate since 2014
- Author: Anthony Vega Jul 29, 2018,
Jul 29, 2018, 2:57
And he insisted the economic numbers are "very sustainable" and not "a one-time shot".
Economists have said exports largely increased in the last quarter amid efforts by U.S. companies to get products out before additional retaliatory tariffs take effect.
Nobody can dispute that the USA economy had good growth in the second quarter.
Consumer spending grew 4 percent, more than expected, while nonresidential business investment climbed at a pace of 7.3 percent. It rose 4.3 percent in the second quarter, up from 2 percent in the first quarter.
Former President Barack Obama was doubtful the man who followed him into the Oval Office could fix the sluggish USA economy, but a federal report made public Friday provides solid evidence President Donald Trump is doing just that.
It remains possible then, that reality will prove Trump's ebullient optimism about the future of American economic growth right.
The growth of inflation-adjusted personal income slowed somewhat in the second quarter, rising 2.6% against a 4.4% increase in the first three month of the year. "And the year-over-year growth rate is just above the long term trend of 1.8 percent". And their reasoning is simple: That 4.1 percent growth rate is partially the product of temporary distortions in patterns of trade, and an ephemeral uptick in government spending. In other words, can the economy keep growing so strongly in the months and years ahead?
In the April-June period, consumer spending had its biggest bounce in almost four years, with Americans buying more cars and spending more liberally on health care, housing, utilities, restaurants and hotels, according to the Commerce Department report.
In a big win for the Trump administration on Friday, the US economy advanced at its fastest pace since 2014. The result was boosted by a budget deal at the start of the year that added billions to defense and domestic spending. Paul Ashworth, at Capital Economics, said that as the government stimulus from tax cuts and higher spending fades, and the Federal Reserve's continued interest rates hikes begin to pinch, "growth will slow markedly from mid-2019 onwards".
PNC Bank is forecasting growth of 3.1% in 2018 - assuming that trade tensions dissipate.
The President is upset that the US central bank has raised interest rates twice so far this year, but it is precisely the Trump administration's inflationary fiscal policies that have forced the Federal Reserve to tighten monetary policy faster than it would otherwise.
Growth in the first quarter was revised up slightly, from 2% to 2.2%, while the fourth quarter of 2017 dropped from 2.9% to 2.3%.
"We will come pretty close to stalling out in 2020 because the growth we are seeing now is not sustainable", Zandi said. Annual growth has averaged just 2.2 percent since mid-2009 through the end of past year, the same as previously reported.