Enero 22, 2018

U.S. economy accelerated during first full Trump quarter

28 Julio 2017, 11:25 | Martinez Canez

Acceleration GDP Rises At 2.6% Annual Pace AFP Andy Buchanan by John Carney28 Jul 20170 28 Jul 2017 28 Jul 2017

Donald Trump plays a stroke in 2012 as he officially opens his multimillion pound Trump International Golf Links course in Aberdeenshire Scotland

Consumer spending, which represents more than two-thirds of all US economic output, came in at a stronger than anticipated 2.8% annual rate. Figures are adjusted for inflation and seasonality.

The mining, oil and gas extraction sector accounted for almost 0.4 percentage points of May's overall economic growth.

Even with the spring rebound, analysts believe the economy will be unable to meet the ambitious targets set by Trump.

The economy also benefited during the second quarter from increased federal government spending. Imports, which are a subtraction in the calculation of GDP, increased (table 2). Nonresidential fixed investment increased by 5.2 percent in the second quarter, extending the 7.2 percent growth rate from the first quarter.

What's remarkable is that even though it hasn't quite felt like it, the US economy just recorded its 96th month of growth since the Great Recession. That made trade a small-0.18 percentage point-contributer to overall growth. Companies increased investment in equipment such as computers by 8.2%, though spending on structures such as oil rigs and offices grew more slowly.

Nonetheless, other areas of growth were also strong, including manufacturing and retail, with the second quarter on track for growth of around 3.5 percent, said Exarhos.

However, housing construction slowed to a 6.8 percent rate, a after an 11.1 percent surge in the winter due to warmer-than-normal weather. There was notable strength in non-residential capital spending, although residential investment declined for the quarter after a strong result previously.

Businesses, meanwhile, didn't restock their shelves and warehouses in the second quarter.

Despite the "in-line" headline GDP number, the dollar reacted with losses, falling 0.3% against a basked of its peers.

Specifically, that metric went from 1.4% to 1.2%, while the Fed's favorite inflationary metric, core PCE, tumbled from a downward revised 1.8% to 0.9%.

The Q2 employment cost index fell from 0.8% to 0.5%.

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