The U.S. economy likely grew at its slowest pace in more than two years in the s...
WASHINGTON - The U.S. economy likely grew at its slowest pace in more than two years in the second quarter as an acceleration in consumer spending was probably offset by weak exports and business investment.
“The slowing in the economy spooked the Fed and markets, but the sky is not falling,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “If we do get a recession next year it would be because we shot ourselves in the foot with the trade tensions.” The economy is slowing largely as the stimulus from the White House’s $1.5 trillion tax cut package fades. The tax cuts together with more government spending and deregulation were part of measures adopted by the Trump administration to boost annual economic growth to 3.0% on a sustained basis.
The jump in consumer spending was, however, likely blunted by a sharp drop in exports, in a reversal of the strong growth experienced in the first quarter. Weak exports are expected to have resulted in the deterioration of the trade deficit in the second quarter. Trade is believed to have subtracted from GDP growth last quarter after contributing 0.94 percentage point in the January-March period.
Design problems at aerospace giant Boeing have hurt business investment, with some spillover to exports.
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