The economy grew at a 4.1 percent rate in the second quarter, the highest since 2014
by Heather Long
President Donald Trump speaks on trade at Granite City Works Steel Coil Warehouse, Thursday, July 26, 2018, Granite City, Ill. (AP Photo/Evan Vucci)
July 27 at 8:35 AM Email the author
The U.S. economy expanded at an annualized rate of 4.1 percent from April to June, a sharp jump from the first three months of 2018, when the economy grew at a tepid 2.2 percent rate, according to the federal government.
The quarterly growth is the fastest since the third quarter of 2014 and provides President Trump and Republicans a boost as they make the economy a key part of their campaign message heading into November’s midterm elections.
But economists caution the growth was driven by one-time factors and is likely to be short-lived. The uptick was largely driven by solid consumer spending and a big expansion of U.S. products sold overseas.
Soybean exports exploded in the first quarter, as customers in several countries scrambled to snatch up supplies before new foreign taxes on U.S. soybeans went into effect, part of a broad retaliation against Trump’s tariffs on a range of foreign products.
Economists expect that the buying frenzy has ended and exports will no longer be a big boost to growth going forward. If anything, trade could curtail growth later this year if foreign companies buy less from the United States.
The Trump Administration has said this is the beginning of a new era of stronger growth after the tax cuts and higher government spending, but the vast majority of independent economists see this quarter as a blip.
The Federal Reserve predicts annual growth will be 2.8 percent this year and then fall back to 2.4 percent in 2019 and 2 percent in 2020.
“If it has a 4 in front of it, we’re happy,” Trump told a crowd of steel workers in Illinois on Thursday. He called growth of 3 percent merely “okay.”