Trump touts economy: 'These numbers are very, very sustainable'

Trump touts economy: 'These numbers are very, very sustainable'

Import duties are seen undercutting economic growth, with higher prices for goods discouraging consumer spending and businesses shelving investment plans. "This president's economic policies are succeeding, and trade is a big part of that".

Friday's report from the Commerce Department showed consumer spending rose by 4% in the second quarter, up from the 0.5% rate seen in the previous three months. So, in the next few months, the second-quarter GDP figures could turn out to be much different than they look now.

But that boost in exports will now reverse because the tariffs have been imposed, Shepherdson says. Exports were higher than expected because farmers are trying to ship products to other countries before the tariff riff is a full-scale war. Unemployment among Blacks, Hispanics and women is now at record lows.

In other words, foreign companies appear to be importing as many goods as they can from the US before their own governments retaliate against Trump's tariffs with duties of their own. That revision showed that growth in 2017 came in at 2.2 percent, slightly lower than the 2.3 percent previously reported. Exports surged at a 9.3 percent annual rate in the second quarter, while imports grew at a scant 0.5 percent rate.

"This isn't a one time shot", he said on Friday.

President Donald Trump said his tax cuts and trade policies helped growth and would continue to help the economy expand.

Following February job numbers, I noted that the continued strong job market would contribute to economic growth. Economists also expect slower growth in 2019 and 2020.

The US trade deficit, Trump noted, has dropped by more than $50 billion.

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According to analysts from Wells Fargo, the 2.2% growth rate year-over-year is enough to sustain higher interest rate from the Federal Reserve.

There were some signs of softness, however. But housing, which has struggled this year, shrank at a 1.1 percent annual rate after an even sharper 3.4 percent annual decline in the first quarter.

That weakness is a potential red flag, said Lindsey Piegza, chief economist at Stifel. At its core, it says that consumer demand is taking a massive hit.

Trump called the narrowing of the trade deficit "one of the biggest wins in the report".

"What we're seeing in the Trump economy is wages going up for the first time in a long time", Peter Navarro, the top trade adviser to the president, told NPR Friday before the GDP report was released.

The weak capex data signals that corporate executives aren't "overly enthusiastic about their growth prospects, regardless of what any sentiment survey may indicate", Tematica said. But today's economic data is certainly good, and the president can take some of the credit.

Last December in this space, I argued that, combined with the removal of burdensome regulations, the tax cuts would stimulate economic growth. Perversely, so did the threat of various trade rows. That's because, ahead of retaliatory tariffs by China on US agricultural products, China went on a soybean buying spree. We were just talking about, you know, soybean sales.

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