The US Commerce Department will release its latest economic growth figures today. Economists anticipate the American economy clocked an annualised
The US Commerce Department will release its latest economic growth figures today. Economists anticipate the American economy clocked an annualised GDP growth figure of between 4-5% in the three months to June 30.
Such bullish forecasts (the US economy grew just 1.6% in 2016) come on the back of 0.5% growth in retail sales in June and 1.3% in May, a significant upswing from the same period last year. Consumer spending generally accounts for more than two-thirds of US economic activity. Economists attribute the strong retail sales growth this year to the tax cuts pushed through by the Trump administration in December 2017.
However, over 100 Economists polled by Reuters, also expect today’s figures to be the peak before a downturn for the rest of the year as trade tariffs increase prices on many imported goods. These in turn increase costs for businesses—especially those reliant on global supply chains—and discourage consumer spending.
Expect the White House to trumpet the positive growth figures as validation of its tax and trade policies, possibly using the strong growth figures as an excuse to forge ahead with $500 billion in purposed tariffs on China. However, the real figures to watch are the third quarter figures—due on December 21—to see whether a downward trend is emerging and whether the impact of tariffs can be attributable to such a trend.
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