Speaking from the South Lawn of the White House Friday morning, President Donald Trump boasted about the GDP numbers, saying that his administration has "accomplished an economic turnaround of historic proportions". "We're on track to hit the highest annual growth rate in over 13 years", he said after the numbers were released.
With the new numbers on the GDP growth rate today, CNN's Brooke Baldwin said, "Obviously the President fulfilling a major economic promise".
But Trump nevertheless focused on the sudden drop in the USA trade deficit as another triumph for his tough trade policies.
Another factor that bolstered the second quarter was a rush by exporters of soybeans and other products to get their shipments to other countries before retaliatory tariffs in response to Trump's get-tough trade policies took effect. If Trump's trade wars continue or intensify, growth will suffer more.
TRUMP: "In the first three months after tax cuts, over $300 billion poured back into the United States from overseas". In fact, out of the 32 quarters that president Obama was in office, 15 of them had an annualized growth rate north of 2%.
But economists caution that the growth rate is hard to maintain.
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The personal consumption expenditures price index, a key metric that the Federal Reserve uses to decide whether to raise interest rates, came in at 1.8%, down from 2.5% in the first quarter.
Economists' forecasts for second-quarter GDP, the value of all goods and services produced in the nation, ranged from 3 percent to 5 percent.
The $1.5 trillion tax cut passed by Congress late in 2017 was part of President Donald Trump's plan to boost economic growth to the above 3 per cent annual growth rate that marked the robust expansions of the 20th century.
The 4.1 percent rate was the best since the third quarter of 2014.
Government spending increased at a 2.1 percent rate, adding 0.37 percentage point to growth. And it would nearly certainly mean a big boost in the standard of living for many Americans, with higher wages and better public services as the government raked in more tax dollars from a booming economy. The stimulus is expected to fade sometime in 2019.
"The second quarter was a strong quarter, but it was juiced up by the tax cuts and higher government spending", said Mark Zandi, chief economist Moody's Analytics. Just before Beijing's retaliatory tariffs against the US started at the beginning of July, US soybean exports to China skyrocketed.
Friday's report showed the economy boomed in the second quarter of 2018, although many economists and policymakers believe the pace is unlikely to be sustained in the long run, given the ageing of the population and slow productivity growth of recent years.