Trump hails growth as one-offs and consumers boost economy

Team Trump is looking to get ahead of the next jobs crisis

The U.S. economy accelerated last quarter at an annual rate of 4.1 percent, the government estimated Friday, as consumers spent tax-cut money, businesses stepped up investment and exporters rushed to ship their goods ahead of retaliatory tariffs.

The figures released on Friday by the US Department of Commerce showed the economy grew at the fastest pace since 2014 during from April to June.

"We've accomplished an economic turnaround of historic proportions", Mr Trump told reporters during hastily arranged remarks on the South Lawn of the White House, where he was joined by Vice President Mike Pence and flanked by members of his economic team.

"Big surprise: The underlying data for Q2 is better still than the headline 4.1 percent annual GDP growth rate", he wrote, noting that consumption was a "very strong 4.0 percent", while business investment hit 7.3 percent.

"Once again, we are the economic envy of the entire world", Trump said, adding that "America is being respected again".

"One of the more underreported stories is we now have a trade deficit that dropped by more than $50 billion", said Hannity.

The export rally likely reflected efforts by buyers to get their soybeans before China's 25 per cent retaliatory tariffs on U.S. soybeans, which hit in July. Consumers began spending their higher take-home pay on autos and other big-ticket items, spurred by the $1.5 trillion tax cut Trump pushed through Congress in December.

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It also showed that inflation, which has been lacklustre in recent years, rose by 2% according to the Fed's preferred measure, which is tied to consumer spending, except on food and energy.

The growth was the fastest since 2014, following first-quarter growth of 2.2 percent that was revised up from 2 percent.

His jubilation did not extend to Wall Street, where stocks closed down markedly as investors feared the economy has peaked and amid disappointing earnings and trade war fears. And he insisted the economic numbers are "very sustainable" and not "a one-time shot".

Business investment grew at a solid 7.3 percent annual rate. Trump had better hope that the economy continues to accelerate beyond 4.1 percent growth or we are in deep trouble.

Economists' forecasts for second-quarter GDP, the value of all goods and services produced in the nation, ranged from 3 percent to 5 percent. Both he and Shepherdson had predicted very strong second-quarter GDP growth of 4.5 percent or higher.

"We are now on track to hit an average GDP annual growth of over three percent and it could be substantially over three percent", Trump said.

Trump also repeated his claim that the US has a trade deficit with Canada, but that is true only in goods. The soybean boost is likely to reverse in the coming quarters and the fiscal stimulus is seen fading in 2019. Deficit spending aside, Mr. Trump's economic policies go against just about everything the Trudeau government stands for.

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