Trump takes credit as U.S. economy grows at fastest pace since 2014

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USA economy surged to an annual growth rate of 4.1 per cent - the fastest pace since 2014 - in the April-June quarter.

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".

Private-sector economists predict growth will slow to 2.8 per cent in the third quarter, according to Bloomberg polling.

The U.S. economy exhibited wonderful growth in the second quarter of 2018, with the gross domestic product (GDP) climbing 4.1%, almost doubling the first quarter, which was revised up to 2.2%.

This is the first time since the 2016 election that U.S. growth has hit the 4% target President Trump set himself during the campaign.

Faucher said, "The second half of the year will be good - not quite as good as we saw in the second quarter, but still pretty solid".

Unlike in 2015, growth has accelerated this year, in part, because of the stimulus from Trump's deficit-funded tax cuts.

Second-quarter economic growth came in at an annual rate of 4.1%, the government said Friday. But it's hard to get that message out because U.S. GDP growth hit 4.1 percent in the second quarter of 2018.

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Trump called the narrowing of the trade deficit "one of the biggest wins in the report". Excluding the tariffs-related bump, analysts estimate the economy probably grew at a 2.5 percent pace in the second quarter. Growth reached 5.2 per cent in the third quarter of 2014, before falling back to 2 per cent in the next quarter.

Consumer spending, which accounts for 70% of economic activity, rebounded to a 4% annual growth rate after turning in a lacklustre 0.5% gain in the first quarter.

After next year, many economists expect growth rates to subside again, as the boost from tax cuts and federal spending dissipates.

Trump's GDP number is a remarkable feat, since the U.S. is now progressing on a strong upward trajectory after seven interest rate hikes from the Fed.

Due to declines in birth rates, workers will be joining the economy at a slower pace and this hurts overall growth levels. "If one controls for the impact of the one-time increase in government spending, temporary tax boost and exports, that robust topline growth rate is closer to 3 percent".

Growth in the first quarter was revised up slightly, from 2% to 2.2%, while the fourth quarter of 2017 dropped from 2.9% to 2.3%.

"With the year-over-year change in the personal consumption expenditures (PCE) deflator (2.2 percent) as well as the core PCE deflator (1.9 percent) up relative to the past four quarters, the case remains for the Fed to raise the benchmark funds rate". Barack Obama was the first president to never have even a single year of even average economic growth during his two terms. Annual growth has averaged just 2.2 percent since mid-2009 through the end of past year, the same as previously reported.