The United States Economy Grew By 2.5%, Below Trump’s Target of 3%

Official figures stated that the GDP expanded by 2.5% during 2018.

Growth slowed during the second quarter as exports declined, and companies invested less in their businesses.

GDP grew at 2.1% between April and June but below 3.1% in the first three months of the year.

Second quarter growth rate was better than the 1.8% expansion forecast due to strong consumer spending and government spending.

However, in the first quarter both foreign trade and business investment shrank as the US continued its trade war with China.

Nancy Curtin, chief investment officer of Close Brothers Asset Management, stated that “While slower growth reflects the global impact of the ongoing trade tensions and export slowdown, the labor market and productivity improvements have provided a bright spot in recent weeks.”

According to Trump, Quarter to GDP being up by 2.1% is “not bad considering we have the very heavy weight of the Federal Reserve anchor wrapped around our neck.” Trump wants the Fed to cut interest rates to stimulate the economy.

Neil Wilson, chief market analyst as Markets.com, stated that “the Fed will instantly come under attack from both the markets and Trump. The growth number just confirms a sense that the Fed is no longer data dependent, but at the mercy of tantrums – both in financial markets and the White House.”