U.S. economy grew at robust 4.2 percent rate

WASHINGTON—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 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 gettough 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 point 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 around 3 percent "before momentum starts to fade in 2019."