U.S. economy posts best performance since late 2014

U.S. economy posts best performance since late 2014

U.S. economy posts best performance since late 2014

The US economy grew at a 4.1 per cent rate, the strongest pace in almost four years during the second quarter, powered by a rebound in consumer spending, exports and firm business investment, the Commerce Department said on Friday.

That marks the fastest pace of growth since 2014, and was driven by consumers who began spending their tax cuts and exporters who rushed to get their products delivered ahead of retaliatory tariffs.

President Trump touted the "amazing" growth during remarks at the White House shortly after the report's release, cheering a shrinking trade deficit and claiming the country is on track to hit the highest annual growth rate in over 13 years.

Gross domestic product increased at a 4.1 per cent annualised rate also as government spending picked up, the Commerce Department said in its snapshot of second-quarter GDP on Friday.

Trump, who has repeatedly attacked the economic record of the Obama administration, pledged during the 2016 campaign to double growth to 4 percent or better.

THE FACTS: Economists do expect a strong number for growth in the April-June quarter, but it is likely to be a temporary bounce. Net exports added 1.06 percentage point to the quarter's 4.1 per cent GDP growth rate, as exports rose strongly.

President Donald Trump says the USA is the "economic envy of the entire world" after the release of new data overnight. "While growth may be roaring, critics say the tax cuts may not filter down significantly to blue-collar Americans and are certain to widen economic inequality". Economists polled by Bloomberg expected the report to show the economy grew at an annualized rate of 4.2% in the second three months of the year.

He said the decline in the trade deficit was one of the "biggest wins" in the BEA report and it is "very dear to my heart because we've been ripped off by the world". Trump has promised to boost GDP growth above 3% on a sustained basis, and his hope for the second quarter was "anything with a four".

The acceleration in real GDP growth in the second quarter reflected accelerations in PCE and in exports, a smaller decrease in residential fixed investment, and accelerations in federal government spending and in state and local spending, the BEA said in its release Friday. He said somebody had predicted 5.3% growth, which he didn't think would happen, but he'd be happy with anything over around 3.7%.

The pace of expansion in consumer spending, which accounts for about 70 percent of the economy, exceeded projections for 3 percent and contributed 2.69 percentage points to growth.

But yes, we can talk all day long about GDP numbers all day long, but that doesn't matter if you just got laid off.

Business investment grew at a solid 7.3 percent annual rate.

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

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

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