The U.S. economy grew at the strongest rate in roughly four years in the second quarter of 2018, matching economists’ high growth expectations heading into Friday’s announcement.
Gross domestic product — the total value of all final goods and services in the U.S. economy — grew at a 4.1-percent rate in the second quarter, propelled by an increase in consumer spending, exports, federal and local government spending and business investment, according to the Bureau of Economic Analysis.
In reference to 2017 second-quarter growth numbers, this year’s look stellar. Economic output grew just 2.8 percent in the second quarter of 2017.
Economists expected second quarter figures to hit levels as high as 5 percent, which would have been the highest second-quarter growth rate since 2014. Preliminary numbers generally pegged growth close to Friday’s actual figures. (RELATED: Economists Predict Trump’s China Tariffs Will Cost The U.S. Economy 190K Jobs)
President Donald Trump promised the “best financial numbers on the planet” leading into Friday’s rollout, adding that it was great to have the U.S. “winning again.”
Our Country is doing GREAT. Best financial numbers on the Planet. Great to have USA WINNING AGAIN!
— Donald J. Trump (@realDonaldTrump) July 24, 2018
Economists attributed the president’s tariffs for up to 1 percent of the total expected growth in the second quarter leading up to Friday. The consensus was that an increase in consumer spending from the first to the second quarter, along with a narrowing trade deficit, helped propel the economy to higher levels of growth. U.S. exports rose in the second quarter, while imports remained relatively stagnant. (RELATED: Mnuchin Says ‘Don’t Minimize’ The Threat Of Tariffs On All Chinese Goods)
The expectations of a narrowing trade deficit were spot on, with net exports adding 1.06 percentage points to the 4.1-percent GDP growth. Overall, net exports rose robustly.
Consumer spending also fell in-line with predictions, with personal-consumption spending rising at a 4-percent annual rate in the second quarter. As a percentage of GDP, consumer spending accounts for over 66 percent of the nation’s economy.
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