Consumers - buoyed by low unemployment, low borrowing costs and recent tax cut - ramped up their spending at a 4 per cent annual pace, contributing 2.69 percentage points to second-quarter growth in GDP (consumer spending accounts for about 70 per cent of the United States economy).
Soybean exports exploded in the first quarter, as customers in several countries scrambled to snatch up supplies before new foreign taxes on USA soybeans went into effect, part of a broad retaliation against Trump's tariffs on a range of foreign products. "With imports increasing by only 0.5%, net external trade added 1.0 percentage point to overall GDP growth, while inventories ended up subtracting 1.0 percentage point", the economics analysis firm adds. And, ironically, Trump's various protectionist measures spurred a boom for US exporters - because foreign buyers were eager to stock up on American goods before their governments slapped retaliatory tariffs on such products.
President Donald Trump and his advisers trumpeted the numbers in a news conference outside the White House, saying that the economy was on pace to grow at the fastest rate in 13 years. Inventories subtracted 1 point, the most since 2014, Commerce said, citing soybean stocks as well as those of drugs and sundries and petroleum and related products.
Compared to the second quarter of 2017, the economy grew 2.8 percent.
The latest GDP figure was almost double the 2.2 percent growth rate in the first quarter, which was revised up from a previous estimate of 2 percent annual growth. Growth will slow, but we may not have a recession. But most economists forecast it will fall back below 3 per cent soon afterward. When services are included, such as insurance, tourism, and engineering, the USA had a $2.8 billion surplus with Canada previous year.More news: Roseanne Barr on racist tweet: ‘I wish I worded it better’
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The president has been floating plans to slap import taxes on hundreds of billions of dollars of foreign goods, which has led to the risk of retaliatory tariffs by foreign companies on US goods. The economic bump, at 4.1 percent, was the best quarter the country has seen since 2014, according to the Commerce Department. Tax cuts tend to give a boost to the economy, hence we have seen robust growth since then. Just before Beijing's retaliatory tariffs against the US started at the beginning of July, US soybean exports to China skyrocketed.
Trump, who has repeatedly attacked the economic record of his predecessor's administration, pledged during the 2016 campaign to double growth to 4 percent or better. Ayesha, the president clearly feeling pretty good, though, about these numbers.
Will the economy average 5% growth for the remainder of the year?
Is the United States economy working for you? "Undoubtedly we're going to hear the familiar chant about how this is Obama's economy".
Were you unemployed but have found a job?