President Trump told a crowd at an Illinois steel plant on Thursday that if quarterly growth “has a 4 in front of it, we’re happy.”
On Friday, the Commerce Department reported that indeed the economy had grown 4.1 percent in the second quarter of this year – the best quarter in four years.
“Historic unemployment, a steady rise in wages, and a variety of tax breaks likely boosted spending by businesses and consumers during the April through June period,” NBC News reported.
But the network cautioned that “Friday’s figures all but solidify the likelihood that the Federal Reserve will continue its plan of gradually raising its benchmark interest rate for the remainder of 2018 and into 2019.”
ABC News suggested we should enjoy our growth, fueled by “consumers who began spending their tax cuts and exporters who rushed to get their products delivered ahead of retaliatory tariffs,” now because it is unlikely to last.
“President Donald Trump is predicting growth will accelerate under his economic policies,” ABC News wrote. “But private forecasters cautioned that the April-June pace is unsustainable because it stems from temporary factors. The rest of the year is likely to see good, but slower growth of around 3 percent.” – READ MORE
[divider][/divider]The man, identified as Tony, said he was a third-generation steelworker who had been laid off two-and-a-half years ago.
He said he found other work, but he was forced to work 70 to 80-hour weeks just to make ends meet.
Now that he’s got his job at the mill back, he said he can make a living with a 40-hour week and spend more time with his family.
When he was asked what it means to his family and friends to know that he’s back at work at the mill, he wiped away tears and replied, “That we’ve got a way of life.”
“It’s just nice to know that we’ve got someone fighting for us to keep our jobs. It was rough for a lot of us,” Tony said. – READ MORE
[divider][/divider]The U.S. economy exploded in the second quarter of 2018, with the gross domestic product (GDP) climbing 4.1% — nearly doubling the first quarter, which was revised up to 2.2%.
The booming rate is the highest since the third quarter of 2014 and just the third-highest since the Great Recession began in 2008. The running four-quarter average is 3.1%, considered by economists to be a very strong number.
In Q2 of 2018, consumer spending grew 4%, while nonresidential business investment jumped 7.3%, both also considered strong numbers.
Wrote CNBC: Exports rose in part as farmers rushed to get soybeans to China ahead of expected retaliatory tariffs to take effect in the coming days. Declines in private inventory investment and residential fixed investment were the main drags, the report said.
The tariffs as well as last year’s massive tax cut both were key factors in the growth.
“Bottom line, if it wasn’t for a big upside to inflation, GDP would have been much better because of the upside in spending, boost in exports and government spending which offset an unexpected sharp decline in inventories and no change in gross private investment,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. – READ MORE
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