US Economy Grows Most in 4 Years

US Economy Grows Most in 4 Years

US Economy Grows Most in 4 Years

US economic growth has come in stronger than initially estimated in Q-2, posting its best performance in nearly 4 years, as businesses boosted spending on software and imports declined.

Gross domestic product (GDP) increased at a 4.2% annualized rate, the US Commerce Department said Wednesday in its 2nd estimate of GDP growth for the April-June frame. That was up from the 4.1% pace of expansion it reported in July and was the fastest rate since Q-3 of Y 2014.

Businesses spent more on software than previously estimated in the second quarter and the nation also imported less Crude Oil. Stronger business spending and a smaller import bill offset a small downward revision to consumer spending.

This now put the economy on track to hit The Trump Administration’s target of 3% annual growth.

While consumer spending has remained strong early in Q-3, the housing market has weakened further with home-building rising less than expected in July and sales of new and previously owned homes declining.

The Trump Administration’s “America First” policies have led to an escalation of a trade dispute between the United States and China as well as tit-for-tat tariffs with the EU, Canada and Mexico, are not likely to pose a risk to the economy.

Economists had expected Q-2 GDP growth would be revised down to a 4.0 pace. The economy grew at a 2.2% rate in the January-March frame.

Growth in consumer spending, which accounts for roughly 72% of US economic activity, was lowered to a 3.8% rate in the second quarter instead of the previously reported 4.0% pace. Consumer spending increased at a 0.5% pace in Q-1.

Soybean exports were accelerated in Q-2 to beat Chinese tariffs that took effect in July. Overall exports rose at a 9.1% rate in Q-1 instead of the previously estimated 9.3% pace.

Imports declined at a 0.4% rate, with petroleum accounting for much of the drop. Imports were previously reported to have grown at a 0.5% pace of increase.

That sharply narrowed the trade deficit. Trade added 1.17% to GDP growth in Q-2 rather than the previously reported 1.06%

America First!

The following two tabs change content below.

Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

You must be logged in to post comments :  
CONNECT WITH