The President Says 4.1% GDP GROWTH is JUST THE BEGINNING

Trump Breaks Tradition on GDP Figures

Trump Breaks Tradition on GDP Figures

The 4.1 percent growth is the fastest economic growth since 2014, when the economy grew at 4.9 percent in the third quarter of that year. And he delivered on those promises, by cutting government red tape and getting the biggest tax cut through Congress since President Reagan in 1981.

"We're on track to hit the highest average annual growth rate in over 13 years", Mr. Trump said at the White House. "And I will say this right now and I will say it strongly, as the deals come in one by one, we're going to go a lot higher than these numbers, and these are great numbers".

Today's government report that the economy grew at an annual rate of 4.1 percent was good news- but it quickly raised a widespread question: is it sustainable? Trump had better hope that the economy continues to accelerate beyond 4.1 percent growth or we are in deep trouble. If Trump's trade wars continue or intensify, growth will suffer more. This is a strong economy.

David Rosenberg, the chief economist of Gluskin Sheff, argues trade disputes may play an even bigger role in inflating GDP. "This isn't a one-time shot", he said. "I think the numbers are going to be outstanding". But economists warn it's unlikely to last. Many economists think that may be sustainable for the remainder of the year.

Exports are a particularly dramatic example.

"The economy is doing quite well", said Michael Feroli, chief USA economist at JPMorgan Chase & Co. But in recent months, the trade dispute sparked an unexpected short-term boost in exports. That was the fastest in 3-1/2 years and followed the January-March period's stall-speed pace of 0.5 percent. Most significantly, China appears to have accelerated purchases of soybeans, crude oil, and other exports before new tariffs went into effect.

The gains were driven by strong consumer spending and a surge in exports as firms rushed to beat new trade tariffs.

Barclays had expected 5 percent growth but the drag in inventories and the revision to first-quarter growth subtracted from the second quarter number.

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.

Price data in the report indicated that inflation was in line with the Fed's goal.

The president portrays an economy breaking free of its shackles as his administration cuts red tape and lowers taxes.

The president also said more than 3.5 million Americans have been lifted off food stamps since he took office. But, he says, that growth in spending will fizzle.

Finally, here's Trump in September 2016 saying "it's time to establish a national goal of reaching 4 percent economic growth".

They predicted the rest of the year is likely to see solid, but slower growth of around three percent. Shepherdson predicts about the same. "And nobody mentions the fact that these plants are creating tremendous numbers of jobs", the president said, suggesting that he was committed to maintaining tariffs on steel and aluminum, despite an apparent breakthrough in trade talks with Europe.

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