USA

Tariffs fail to derail economy as US growth surges past expectations

The US economy grew more than expected in the second quarter of the year, diminishing fears of a recession.

Gross domestic product (GDP) grew at three percent in the April through June period.  

That was considerably better than the 2.3 percent anticipated by analysts. 

The figures demonstrate a rebound after the economy contracted at the start of the year. 

The unexpected pace was largely driven by a turnaround in the trade imbalance and renewed consumer strength. 

President Trump described the data as ‘WAY BETTER THAN EXPECTED!’ in a post on Truth Social. 

Trump added that the positive data should push the Federal Reserve into lowering interest rates at its decision announcement this afternoon. 

‘MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!’ the president wrote.  

Trump said the positive data should push the Federal Reserve into lowering interest rates

However, analysts believe the strong data will mean the Fed is comfortable sticking to its cautious strategy. 

‘The strength in these numbers likely puts to bed the possibility of a rate cut from the Fed who are due to meet later today,’ Isaac Stell, Investment Manager at Wealth Club said. 

‘Despite continuing public pressure from President Trump, Powell and co are likely to rebuff requests for rate cuts and keep a steady footing whilst the economy shows no clear signs of tripping up,’ she added. 

In premarket trading, futures for the S&P 500 were up 0.1 percent, while futures for the Nasdaq rose 0.3 percent. 

Consumer spending rose 1.4 percent in the second quarter, better than the 0.5 percent in the first three months of the year.

In the first quarter imports surged as businesses tried to stock up on goods ahead of tariffs, however in the last quarter imports fell 30.3 percent.

Although exports dipped 1.8 percent in the period the drop in imports helped to ease the imbalance. 

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  • Source of information and images “dailymail

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