Published: Mon, July 30, 2018
Global Media | By Jackie Banks

The US economy grows at the fastest pace since 2014

The US economy grows at the fastest pace since 2014

Trump had already hinted at a strong GDP report, again breaking with the tradition of United States presidents not commenting on major economic data before its release.

"By increasing growth to 3 percent over the next 10 years, that would mean 12 million new American jobs and $10 trillion of new American wealth at least", he continued, adding that the numbers are sustainable.

As many economists have pointed out, the tax cuts were created to have long term effects focused on capital investment and it will take years for any such scenario to play out. "This isn't a one-time shot", he said. "I happen to think we're going to do extraordinarily well in our next report".

They predicted the rest of the year is likely to see solid, but slower growth of around 3 percent.

"These numbers are very, very sustainable", Mr. Trump said. That is the real question.

At that time I noted that first quarter numbers are nearly always below the numbers for the year.

AYESHA RASCOE, BYLINE: He's feeling great about these numbers. He cautions, however, that "it'll be hard to repeat this performance on a sustained basis", citing the diminishing boost from tax cuts and a headwind from a stronger dollar as factors in the months ahead.

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The import duties also likely prompted businesses to increase their pace of inventory accumulation. "Unless you cut taxes again, there won't be additional tax cut monies to line company and consumer pocket books". You got it. Now they're trying to sift through all the revisions. And there were other stuff - there was other stuff like that, too.

Is the U.S. economy working for you?

The export rally likely reflected efforts by buyers to get their soybeans before China's 25 per cent retaliatory tariffs on USA soybeans, which hit in July. Federal-funds futures were pricing in a 93% probability for another 25-basis-point increase in the central bank's target rate (currently 1.75%-2%) at its September 25-26 meeting, unchanged from Thursday, according to Bloomberg.

MARTIN: The president in his remarks today reinforcing a message he has put out for many months that he views America as getting ripped off on trade, talking about the deficit. "Maybe we get a soft landing".

He said the decline in the trade deficit was one of the "biggest wins" in the BEA report and it is "very dear to my heart because we've been ripped off by the world".

RASCOE: This is a repeated refrain. The economy bump comes at a good time for the president and his fellow Republicans. The change in the seasonals has clearly changed the distribution of growth over the course of the year. On the other hand, I've talked to people in the aluminum industry who are going back to work as a direct result of these tariffs. "Also, how much double ordering went on because a business couldn't find a truck to deliver goods?" And so he's making the argument that what he's doing right now is working. Average hourly pay, before adjusting for inflation, is rising at about a 2.5 percent annual rate, below the 4 percent level reached in the late 1990s when the unemployment rate was as low as it is now.

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