U.S. President Donald Trump predicted data on Friday will show the U.S. economy is in “terrific” shape amid forecasts that growth topped 4 per cent in the second quarter, the fastest since 2014.
Speaking at a steel mill in Granite City, Illinois, on Thursday, Trump doubted the expansion would reach the 5.3 per cent some economists have penciled in, but said that “if it has a four in front of it, we’re happy.” He called recent economic figures “unthinkable.”
Gross domestic product expanded at a 4.2 per cent annualized rate in the April-June period, according to the Bloomberg survey median, with forecasts ranging as high as 5 per cent. The Commerce Department will release the statistics at 8:30 a.m. ET in Washington.
Among the forces behind the pickup from 2 per cent growth in the first quarter is the biggest tax overhaul since the Reagan era boosting company and corporate spending. The traditionally volatile categories of inventories and trade also probably lifted the number -- helped by a likely temporary jump in soybean exports ahead of retaliatory tariffs
Analysts aren’t convinced the acceleration will last, predicting solid yet less spectacular growth in the second half of the year as the tax stimulus begins to fade, the Federal Reserve raises borrowing costs again and the expansion ages. The simmering trade war with China will also weigh on the economy.
At Bloomberg Economics, economists Carl Riccadonna and Tim Mahedy estimate growth of 3.8 per cent in the quarter. “This reflects a number of one-time idiosyncratic factors and should not be viewed as an indication of what is to come in the second half,” they wrote in a report.
Trump said a number just short of 4 percent would also “OK.”