Published: Tue, July 31, 2018
World Media | By Cesar Oliver

Trump hails United States economic growth spurt, promises more ahead

Trump hails United States economic growth spurt, promises more ahead

Mr Trump celebrated the data showing the USA economy surged in the April-June quarter to an annual growth rate of 4.1 percent.

Illustrating the volatility of some elements of GDP, net exports contributed 1.06 percentage point to the pace of growth, the most since 2013, partly on a surge in soybean shipments ahead of retaliatory tariffs. "I'll say it strongly, as the trade deals come in one by one, we're going to go a lot higher than these numbers and these are great numbers".

Private-sector economists predict growth will slow to 2.8 per cent in the third quarter, according to Bloomberg polling.

The Commerce Department reported Friday that the gross domestic product, the country's total output of goods and services, posted its best showing since a 4.9 percent gain in the third quarter of 2014.

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

"We've accomplished an economic turnaround of historic proportions", Trump said in remarks at the White House Friday morning.

Now the president and his economic team say we're seeing the fruit of those cuts in taxes and regulations.

They may be right - but if the economy does grow more than 3 percent for the entire year, it will be something of a milestone, in that it will be the first time since 2005 that we've seen that growth rate.

TRUMP: "One of the biggest wins in the report, and it is, indeed a big one, is that the trade deficit - very dear to my heart because we've been ripped off by the world - has dropped".

The Fed last month estimated that the USA economy would grow at 2.8 percent this year, still below the Trump administration's target of over 3 percent of annual growth rate.

Exports rose at a 9.3% rate in the second quarter, while imports grew at a tiny 0.5% rate.

Exports of US soybeans soared as companies sought to ship them to China before that country slapped tariffs on them in retaliation for USA tariffs on Chinese goods. And their reasoning is simple: That 4.1 percent growth rate is partially the product of temporary distortions in patterns of trade, and an ephemeral uptick in government spending.

At the same time, the uncertainty over trade policy may spur some companies to slow investment, resulting in a hit to economic growth in the second half or later. Consumer spending grew 4 percent, more than estimated, while nonresidential business investment climbed at a 7.3 percent clip.

In 2019, he expects a solid 2.6% growth rate. "Look at the average for the first two quarters, it's now 3.2 percent".

Weak home construction and increased imports, which subtract from economic growth, took it down a notch.

Be very careful though; don't jump to conclusions just by looking at the headline GDP numbers. Annual growth has averaged just 2.2 percent since mid-2009 through the end of previous year, the same as previously reported.

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