U.S. economy grew at robust rate in 2nd quarter Progress, but sanctions on North Korea must remain

Best performance in nearly four years Pompeo says U.S. has evidence of violations

Washington (AP) — The U.S. economy grew at a robust annual rate of 4.2 percent in the second quarter, the best performance in nearly four years, though economists believe growth has slowed in the current quarter partly because of a drag from trade.

The performance of the gross domestic product, the country’s total output of goods and services, was unchanged from an estimate the Commerce Department made last month, the government reported Thursday.

The strong GDP performance has been cited by President Donald Trump as proof that his economic program is working.

“We’re doing much better than anybody thought possible,” Trump said at a Wednesday news conference.

However, a big part of that growth reflected a temporary rush to ship soybeans and other U.S. exports out before penalty tariffs triggered by Trump’s get-tough trade policies took effect.

Economists believe growth has slowed in the current quarter to between 3 percent and 3.5 percent, still a solid pace. While trade boosted GDP by 1.2 percentage points in the second quarter, due to a surge in exports, it is expected to trim growth by around 1 percentage point in the third quarter. Some of that weakness may be offset by businesses rebuilding their inventories at a stronger pace.

“Growth still looks quite strong,” Jim O’Sullivan, chief U.S. economist for High Frequency Economics, said in describing the revised GDP report for the second quarter. He said he was forecasting third and fourth quarter growth at about 3 percent “before momentum starts to fade in 2019.”

A 3 percent growth average in the second half of this year would leave the annual growth in 2018 at 3 percent. That would be the best performance since 2005, three years before the 2008 financial crisis pushed the country into the worst recession since the 1930s.

The country is currently in the 10th year of an economic expansion, the second longest in history. But growth has averaged a lackluster 2.2 percent, making this the weakest recovery in the post-World War II period.

United Nations (AP) — Secretary of State Mike Pompeo said Thursday that the world stands at the “dawn of a new day” in relations with North Korea but that international sanctions must remain in place and vigorously enforced if diplomatic efforts to get the country to denuclearize are to succeed — a position that faces resistance from China and Russia.

Chairing a special session of the U.N. Security Council, Pompeo said President Donald Trump’s diplomatic breakthrough with North Korea’s leader Kim Jong Un has led to a point where the nuclear threat from the country can be resolved. But the “unprecedented diplomatic opening” would close unless the pressure from sanctions is kept up.

“Until the final denuclearization of the DPRK is achieved and fully verified, it is our solemn collective responsibility to fully implement all U.N. Security Council resolutions pertaining to North Korea,” he said, using the initials for the country’s formal name, the Democratic People’s Republic of Korea.

Pompeo said the U.S. has evidence that U.N. sanctions, particularly those restricting North Korean oil imports and coal exports, are being violated and he demanded that U.N. members ensure they are respected.

“Enforcement of U.N. Security Council sanctions must continue vigorously and without fail until we realize final, fully verified denuclearization,” Pompeo said.

China’s Foreign Minister Wang Yi, whose country is North Korea’s main ally, agreed that the sanctions “remain valid” but said the resolutions provide for them to be modified based on North Korea’s compliance and the council should consider doing so.

“China believes that the Security Council may consider invoking in due course this provision in order to encourage (North Korea) and other relevant parties to move denuclearization further ahead,” he said.

Russian Foreign Minister Sergey Lavrov said Moscow believes that certain sanctions, unrelated to the nuclear program, also should be eased.