Trump takes credit as USA economy grows at fastest pace since 2014

Personal consumption expenditures increased 4 percent while business investment jumped 7.3 percent, and government spending was up by 3.5 percent.

The US is experiencing an “economic turnaround of historic proportions”, the President said. “It’ll be hard to repeat this performance on a sustained basis”.

“We’re getting explosive growth in the second quarter because of trade”, economist Ellen Zentner of Morgan Stanley tells the Times.

“The new line from Republicans in Congress is that Americans are “better off” because of last year’s tax cut, so we have to extend it”, Morris Pearl, a former managing director at Blackrock and chair of Patriotic Millionaires, said in a statement.

The 4.1 per cent pace in the second quarter is the fastest the economy has expanded since the third quarter of 2014.

The president called the 4.1 percent rate “amazing” and said, “As the trade deals come in one by one, we’re going to go higher”. Once those tariffs are in place, American goods won’t be in such high demand, which will hurt future GDP growth.

With Friday’s report the U.S. government also published comprehensive revisions to prior GDP data, which did not change the previously presented economic picture. And economic growth topped 4 percent for three full years from 1998 through 2000, an annual rate it hasn’t touched since.

The revisions also showed the economy surpassed $20 trillion in nominal dollars in the first quarter.

Most economists have a somewhat different take on the data.

Quarterly growth of 4 percent or more is not uncommon.

Trump said, “These numbers are very sustainable”. The president’s team expects the economy to keep growth at a solid pace after 2018 as well. Purchases of new autos were a major factor, along with spending on health care, housing and utilities and food services and accommodations. For the market to get back to 130 percent, it would require a much more robust pace of growth. Unemployment among Blacks, Hispanics and women is now at record lows.

The negative contributors to the economic growth were private inventory investment and residential fixed investment. A slowdown in housing construction contributed to that decline. The drag on overall growth, though, was negligible. Second, exports rose 9.3 percent.

But that boost in exports will now reverse because the tariffs have been imposed, Shepherdson says. The recent stretch of subpar growth – just over 2 percent annually – is unprecedented.

Zandi forecast that growth for 2018 will hit 3 percent, the best annual growth rate in over a decade.

That’s not quite the case and it should be said that these first estimates of economic growth are based on skimpy data.

The Democratic National Committee downplayed the positive report, saying in a statement, “Trump will try to boast about the economy, but the reality is that economic growth is not expected to continue at the same rate and workers have not benefited”.