The US economy posted the fastest annual growth rate in almost four years and the strongest among industrialised nations, according to government data released Friday. Gross Domestic Product expanded by an annual rate of 4.1 per cent during Q2, matching analyst expectations, as Americans bought more cars and as foreign sales of oil and soybeans, which now face Chinese tariffs, gave exports the biggest boost in more than four years, the US Commerce Department reported. Paul Ashworth, chief U.S. economist at Capital Economics, said that as the government stimulus from tax cuts and higher spending fades, and the Federal Reserve’s continued interest rates hikes begin to pinch, “growth will slow markedly from mid-2019 onwards.” The latest GDP figure was nearly double the 2.2 percent growth rate in the first quarter, which was revised up from a previous estimate of 2 percent growth. Consumer spending, which accounts for 70 percent of economic activity, rose to a 4 percent annual growth rate after turning in a lackluster 0.5 percent gain in the first quarter. Consumers began spending their higher take-home pay on autos and other big-ticket items, spurred by the $1.5 trillion tax cut Trump pushed through Congress in December.
The result showed the world's largest economy - now valued at US$20 trillion - was in robust health, in part accelerating after the injection of stimulus and tax cuts by President Donald Trump and Republican lawmakers.