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Strong Consumer Spending Boosts Q2 Economic Growth

Strong Consumer Spending Boosts Q2 Economic Growth

Strong Consumer Spending Boosts Q2 Economic Growth
July 28
14:16 2018
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A “more-powerful-than-anticipated” consumer spending recovery helped drive the U.S. economy’s best performance in almost four years in the second quarter, but economists questioned how long it can last.
Official figures revealed that the world’s largest economy grew at an annualized pace of 4.1 percent between April and June, its fastest rate of expansion in four years and almost double the previous quarter’s 2.2 percent increase.
Consumption, which accounts for around three-quarters of the economy, was a big factor behind the better-than-expected numbers. Thanks to tax cuts and a strong jobs market, it grew by 4 percent, compared with a less impressive 0.5 percent rise in the previous quarter.
Brian Coulton, chief economist at Fitch Ratings, said: “While we always expected a bounce back in consumption, it was more powerful than anticipated and speaks to the impact of an increasingly tight labor market and strong job growth on consumer income and households’ confidence.”
Business investment also played its part, up by 7.3 percent, although this was less strong than in the first three months of the year. Exports, meanwhile, rose by 9.3 percent, partly driven by some foreign buyers stockpiling American goods as the trade war heated up.
Economists attribute the increase in spending by consumers

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