U.S. economy grew at a brisk 4.1 percent rate last quarter

Trump Breaks Tradition on GDP Figures

Trump Breaks Tradition on GDP Figures

Fed officials estimate the USA economy's sustainable long-term growth rate to be 1.8 percent, according to their median estimate in June, though their forecast for this year is a percentage point faster. "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".

But most economists and financial analysts disagree.

They predicted the rest of the year is likely to see solid, but slower growth of around three percent.

When American producers increase their exports, GDP goes up.

Economists say the spike is coming mainly from a fluke: There was an unusually large increase in exports in the spring that probably came because other countries were trying to buy USA goods before Trump's trade war escalated and tariffs kicked in.

Everybody wins when we grow the economy - Democrats and Republicans alike.

Just about all economists say the biggest wildcard is the ongoing trade fight with China and other major trading partners.

The Bureau of Economic Analysis (BEA) found that the national GDP increased by 4.1 percent during the second quarter of 2018.

More generally, economists question whether the animal spirits awakened by the US fiscal stimulus can continue to boost growth.

"The bottom line", says Diane Swonk the chief economist at Grant Thornton, "is that the economy is doing better".

Meanwhile core PCE prices, a measure of inflation, grew 2% quarter-on-quarter, less than expected and a slight deceleration from the 2.2% pace of price growth seen to start the year. But this spring, business investment in equipment was sluggish, chugging along at its slowest pace since late 2016. Residential investment contracted at a 1.1 percent rate, the fourth decline in five quarters.

Housing remained a weak spot in the economy amid signs that the sector is poised for its broadest slowdown in years.

"Give me the top 25 congresspeople that are, you know, could go either way, and I want to go out and campaign for those people", Mr. Trump said. The personal savings rate also fell in the second quarter, hitting 6.8% against 7.2% in the first quarter of the year. Both rates and stocks have cooled recently, but stocks have leveled off at a range that anticipates an economy that will grow significantly faster than it has.

The Commerce Department said the gross domestic product - the total output of goods and services produced in the United States - posted its best showing since a 4.9 percent annual increase in the third quarter of 2014. For the market to get back to 130 percent, it would require a much more robust pace of growth. "It's not that there's a great new demand for soybeans", she said.

Consumer spending rose sharply in the second quarter, after slumping in the first.

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