The Register Citizen (Torrington, CT)

U.S. economy continues to show strong growth

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The U.S. economy grew at a strong 4.2 percent annual rate in the April-June quarter, the best showing in nearly four years, as growth stayed on track to produce its strongest gain in more than a decade. Strength in business investment offset slightly slower consumer spending.

The Commerce Department on Wednesday revised up its estimate of growth for last quarter from an initial estimate of a 4.1 percent annual rate. The second quarter marked a sharp improvemen­t from a 2.2 percent gain in the January-March period, though some of the strength last quarter came from temporary factors, including a surge in U.S exports before tariffs were to take effect.

Economists expect growth to slow to a still solid 3 percent annual rate the rest of the year, resulting in full-year growth of 3 percent for 2018, which would be the best performanc­e since 2005, two years before the Great Recession began.

The 4.2 percent annual growth that the government estimated for last quarter is the strongest figure since a 4.3 percent annual gain in the third quarter of 2014. The expectatio­n of 3 percent growth for the entire year would be up from gains of 1.6 percent in 2016 and 2.2 percent last year.

Since the recovery began in mid-2009, growth has been sub-part, with annual gains averaging just 2.2 percent, making this the weakest recovery in the post-war period.

While forecastin­g solid growth around 3 percent this year, economists contend that this performanc­e is being pumped up by the $1.5 trillion tax cut Trump pushed through Congress last year along with increased government spending. Most analysts say they think those factors will begin to fade starting next year and that by 2020, growth may even slow enough to edge the economy close to a possible recession.

The Trump administra­tion rejects that outlook, arguing that its policies will unleash an economic boom that will produce annual growth of 3 percent or better over the next decade.

Wednesday’s GDP report showed that consumer spending, which accounts for about 70 percent of economic activity, expanded at a strong annual rate of 3.8 percent in the second quarter, down slightly from an initial estimate of 4 percent growth in consumer spending. But that downward revision was outweighed by other factors including stronger business investment, which grew at a 6.2 percent rate, driven by spending on such items as computer software.

 ?? Chuck Burton / Associated Press ?? The Commerce Department on Wednesday revised up its estimate of growth for last quarter from an initial estimate of a 4.1 percent annual rate.
Chuck Burton / Associated Press The Commerce Department on Wednesday revised up its estimate of growth for last quarter from an initial estimate of a 4.1 percent annual rate.

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