GDP grew at 4.1% last quarter

Trump Breaks Tradition on GDP Figures

Trump had been briefed about the jobs numbers ahead of their public release, said Larry Kudlow, director of the White House National Economic Council.

Joined by Vice President Mike Pence in a press conference at the White House, Mr Trump predicted "we're going to go a lot higher than these numbers" as he continues to renegotiate global trade deals.

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.

Ian Shepherdson of Pantheon Macroeconomics said swings in inventories and trade, as well as the fading effects from the income tax cuts could put third-quarter growth at three per cent. Consumer spending was also solid. "If growth continues at 3.0% the next two quarters, then real GDP growth will indeed make it to 3.1 percent on a Q4/Q4 basis", he wrote. Economists also expect slower growth in 2019 and 2020. "If I would have used these numbers during the campaign, the fake news back there would've said he's exaggerating".

"Trump has to be careful not to overhype this". Last week, Mr Trump agreed to defer escalating his dispute with the EU. "Wage growth has been anemic".

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

But trade is more likely to become a drag on the USA economic growth in the months ahead, as the United States escalates trade frictions with its major trading partners.

TRUMP: The trade deficit - very dear to my heart because we've been ripped off by the world - has dropped by more than $50 billion. The prospect of another 4 per cent-plus rate anytime soon seems remote.

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Trump said the higher growth will carry on. And he insisted the economic numbers are "very sustainable" and not "a one-time shot".

Still, Mr Lynch said he sees the pace of United States growth easing to an annualised rate of 2.9 per cent through the second half of 2018, from 3.1 per cent in the six months through June.

Paul Ashworth, chief USA economist at Capital Economics, said Friday, "Overall, helped by the massive fiscal stimulus, the economy enjoyed a strong first half of this year but, as the stimulus fades and monetary policy becomes progressively tighter, we expect GDP growth to slow markedly from mid-2019 onwards". This is a strong economy.

January-March quarter GDP growth was revised up to a 2.2 per cent pace from the previously reported 2.0 per cent rate to account for new source information and methodology improvements.

The economy faces two significant structural drags that could keep growth closer to 2 percent than 3 percent: an aging population, which means fewer people are working and more are retired, and weak productivity growth, which means that those who are working aren't increasing their output as quickly as in the past. Canada, Mexico and the European Union also imposed new duties in recent weeks on some U.S. exports in retaliation for U.S. tariffs on steel and aluminium.

Of course, Mr Trump and the Republicans should be credited for priming the economy at least over the past six months. That means some exports simply happened in the second quarter instead of the third, which means third-quarter exports will probably be lower. And since this increase was driven by trade-war fears (as opposed to an explosion in global demand for tofu), soybean exports will likely fall dramatically in the coming months - and bring U.S. GDP down a bit with them.

Business investment in equipment and structures was also positive, although the lion's share of the growth was coming from Americans opening their wallets. But, he says, that growth in spending will fizzle.

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