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US Economic Growth Hits Fastest Rate Since 2014, Trump Rejoices

US Economic Growth Hits Fastest Rate Since 2014, Trump Rejoices

As President Donald Trump and corporate media outlets on Friday enthusiastically touted new GDP figures showing that the United States economy grew by 4.1 percent in the second quarter of 2018, many economists and progressive commentators were quick to counter the glowing headlines by pointing out that corporations and the rich are feasting on most of the growth while workers see their wages fall.

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 USA goods.

The total value of all USA stocks is now equal to 154 percent of the annualized GDP.

"We've accomplished an economic turnaround of historic proportions", Trump said.

Otherwise, the growth will temper off. Trump has kept his promise for one quarter - but he may not be able to keep it for a whole year.

Pay was growing even faster in the late 1960s, when the jobless rate remained below 4 percent for almost four years.

Output expanded 3.1pc in the first half of 2018, putting the economy on track to achieve the Trump administration's target of 3pc annual growth.

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. And the report's revisions of 2017 economic data suggest that American households saved significantly more last year than previously believed - a finding that suggests elevated rates of consumer spending could prove sustainable in the medium term. The success of his gamble will ultimately be determined not by whether growth accelerates, but whether the additional growth pays for or exceeds the $1.5 trillion cost of the cuts.

The numbers were driven by consumers who began spending the tax cuts Trump signed into law previous year and exporters who have been rushing to get their products delivered ahead of retaliatory tariffs.

Trump calls European Union a 'foe'
Mr Putin has repeatedly denied that Russian Federation sought to skew the election. "I love those countries". After Glor noted that the European Union was at the top of his list, Trump replied: "I look at them all".


Consumer spending is being driven by the lower taxes and a robust labor market, which created an average of 215,000 jobs per month in the first half of this year.

In other words, foreign companies appear to be importing as many goods as they can from the USA before their own governments retaliate against Trump's tariffs with duties of their own.

Moreover, concerns over a trade war likely helped improve commerce figures last quarter, as people tried to get deals done ahead of time. Consumer spending grew 4 percent, more than estimated, while nonresidential business investment climbed at a 7.3 percent clip. Government spending also posted a solid gain, rising at a 2.1 percent annual rate. In other words, can the economy keep growing so strongly in the months and years ahead?

"The second quarter was a strong quarter, but it was juiced up by the tax cuts and higher government spending", said Mark Zandi, chief economist Moody's Analytics.

PNC Bank is forecasting growth of 3.1% in 2018 - assuming that trade tensions dissipate.

I scan the headlines at CNN a few times every day, so I can tell you that it's pretty unusual to see a positive story about President Trump featured prominently on the site.

"We will come pretty close to stalling out in 2020 because the growth we are seeing now is not sustainable", Zandi said.

The current expansion, which began in June 2009 and is now the second longest in history, has also been the weakest. The GDP revisions didn't change that narrative.


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