{"id":9722,"date":"2018-08-29T13:57:21","date_gmt":"2018-08-29T20:57:21","guid":{"rendered":"https:\/\/lapost.us\/?p=9722"},"modified":"2018-08-29T13:57:21","modified_gmt":"2018-08-29T20:57:21","slug":"us-economy-logs-best-performance-in-nearly-4-years","status":"publish","type":"post","link":"https:\/\/lapost.us\/?p=9722","title":{"rendered":"US economy logs best performance in nearly 4 years"},"content":{"rendered":"

The numbers:<\/strong>\u00a0The bustling U.S. economy was even stronger in the spring than initially reported thanks to higher government spending and business investment. And companies cashed in big time.<\/p>\n

Gross domestic product expanded at a 4.2% annual pace in the second quarter, up from a preliminary estimate of 4.1%, the government said. GDP is the official measuring stick for the U.S. economy.<\/p>\n

Economists polled by MarketWatch had forecast GDP to be left unchanged at 4.1%.<\/p>\n

The strong growth, along with the biggest tax cuts in 31 years, helped fill corporate coffers.<\/p>\n

Adjusted corporate profits before taxes climb 3.3% in second quarter and they were up a sizzling 7.7% over past year. That\u2019s the biggest 12-month gain in four years.<\/p>\n

What happened:<\/strong>\u00a0Consumer spending will still quite strong in the second quarter, though a bit less so than previously believed. The government said outlays rose 3.8% instead of 4%.<\/p>\n

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Businesses investment was a touch stronger, contributing to overall growth instead of subtracting from it. Firms spent more on software and equipment.<\/p>\n

Yet the value of unsold goods, or inventories, was still a big drag on second-quarter growth. They fell at a revised $27 billion annual rate.<\/p>\n

Exports rose at a slightly revised 9.1% annual clip, though the government said imports fell at a 0.4% rate instead of increasingly slightly. The smaller trade deficit added to strong GDP, though it\u2019s unlikely to last.<\/p>\n

Government spending, meanwhile, advanced 2.3% instead of 2.1%, largely reflecting higher spending on the military.<\/p>\n

The rate of inflation was moved up to a 1.9% annual pace from 1.8%.<\/p>\n

Most other figures in the GDP were little changed.<\/p>\n

Big picture:<\/strong>\u00a0The economy hasn\u2019t been this strong since the early 2000s as evidenced by key stock indexes such as the S&P 500 setting new record highs.<\/p>\n

The U.S. might top 3% growth in 2018 for the first time since 2005, buoyed by strong hiring, falling unemployment, higher incomes and rising business investment.<\/p>\n

Americans increasingly show their optimism in the economy. Consumer confidence rose in August to the highest level in 18 years and reached a peak it\u2019s only matched a few other times in a half century.<\/p>\n

Read:<\/strong>\u00a0Americans haven\u2019t been this confident in the economy since 1990s Internet boom<\/a><\/p>\n

Don\u2019t expect 4% growth in the third quarter, though. Early signs point to the trade deficit widening and that\u2019s a negative for GDP. Consumer spending rarely rises at such a high rate two quarters in a row.<\/p>\n

What\u2019s more, the U.S. has averaged just 2% annual growth during the current nine-year-old expansion. Most economists contend GDP can\u2019t expand much faster than that because of low productivity and a slower increase in the population, the two most critical launching pads for growth.<\/p>\n

What they are saying?<\/strong>\u00a0\u201cThe bottom line is that the economy remains on a solid growth path and still appears to have the potential to remain on a positive track for some time to come,\u201d said Jim Baird, chief investment officer at Plante Moran Financial Advisors.<\/p>\n

Market reaction:<\/strong>\u00a0The Dow Jones Industrial Average\u00a0DJIA,\u00a0+0.23%<\/span><\/a><\/span>\u00a0the S&P 500SPX,\u00a0+0.57%<\/span><\/a><\/span>\u00a0both rose in Wednesday trades. The S&P 500 and NasdaqCOMP,\u00a0+0.99%<\/span><\/a><\/span>\u00a0\u00a0both set a fresh record high. The stock market has surged after President Trump announced a pending new free-trade deal with Mexico.<\/p>\n

Read:<\/strong>\u00a0Trump deal with Mexico eases fears of trade wars<\/a><\/p>\n

The 10-year Treasury yield\u00a0TMUBMUSD10Y,\u00a0+0.06%<\/span><\/a><\/span>\u00a0rose to 2.88% to extend a recent upswing. Bond yields had climbed to as high 3% earlier this year before retreating.<\/p>\n","protected":false},"excerpt":{"rendered":"

The numbers:\u00a0The bustling U.S. economy was...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-9722","post","type-post","status-publish","format-standard","hentry","category-u-s-a"],"_links":{"self":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/9722","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9722"}],"version-history":[{"count":1,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/9722\/revisions"}],"predecessor-version":[{"id":9723,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/9722\/revisions\/9723"}],"wp:attachment":[{"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}