The US economy gathered speed in the second quarter, more than doubling the growth of the first three months of the year as consumer and defense spending accelerated, data released on Friday showed.
GDP increased 2.6 percent in the April-to-June period, compared with 1.2 percent in the first quarter, the US Department of Commerce reported.
A widening trade gap as well as slowing housing sales, business inventories, fixed investment and spending by state and local governments all weighed on growth, the report said.
The second-quarter result, when added to a two-tenths downward revision to the first quarter, put growth in the first half of this year at only 1.9 percent — above the 1.5 percent recorded last year, but below the 2.2 percent average of the prior three years.
The preliminary result is calculated from incomplete data and will be revised in the coming months.
US President Donald Trump took office on a nationalist agenda, vowing to boost growth to 3 percent or higher by slashing taxes and regulation, funding a major infrastructure drive and revamped trade policies.
Trump hailed the second-quarter numbers, saying they were a harbinger of White House efforts to revive the economy.
“GDP is up double from what it was in the first quarter,” he said during a visit to Brentwood, New York.
“We’re doing really well and we took off all those restrictions,” he added. “We’ve sort of liberated the world of creating jobs.”
However, Trump’s legislative agenda has remained backed up behind failed Republican efforts to repeal the prior administration’s signature healthcare laws.
“The result has thrown cold water on the hopes for a pro-growth agenda,” economist Diane Swonk said on Friday in a research note. “In fact, policy uncertainty, which places a drag on growth, is measurably on the rise.”
Meanwhile, the US Federal Reserve has raised interest rates twice so far this year and forecast doing so once more before next year, saying the tepid first quarter was merely a blip on the radar.
While the latest data confirmed this, they also contained fresh news that could undermine justifications for tightening again this year.
The so-called core measure of the personal consumption expenditures price index, an inflation measure the Fed watches closely, grew only 0.9 percent the second quarter, its lowest reading since 2010.
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