The U.S. economy grew at a higher rate than expected reflecting upturns in consumer spending and business investment.
In the second quarter of 2017, gross domestic product (GDP) rose at an annual rate of 3 percent. This was the fastest pace in more than two years.
According to the revised estimates released by the Commerce Department on Aug. 30, the growth rate is better than the initial forecast of 2.6 percent announced a month earlier. And it is a substantial jump compared to the modest increase of 1.2 percent in the first quarter.
“I happen to be one that thinks we can go much higher than 3 percent. There’s no reason why we shouldn’t,” said Trump on Aug. 30 during his speech on tax reform in Springfield, Mo.
Energy production, regulatory relief, and the pro-business policies of the Trump administration are driving the economic growth, according to Stephen Moore, an economist at the Heritage Foundation and former economic advisor to Trump’s 2016 presidential campaign.
He criticized the economists who called Trump’s growth target unrealistic.
“The America-doubters and the never-Trumpers appear to be dead wrong,” he wrote in The Hill.
Consumer spending, which accounts for almost 70 percent of U.S. economic output, increased at a 3.3 percent annual rate in the last quarter. And business investment was higher than initially projected with a nearly 7 percent rise in the second quarter.
After years of underinvestment in computers, factories, technology, and equipment, business spending has grown sharply since Trump’s election, Moore wrote.
“These 3 percent-plus growth rates are especially impressive given that the economy crawled forward at just 1.6 percent growth in President Obama’s last year in office.”
The U.S. economy is expected to grow at a rate of 3.3 percent in the third quarter, according to the Atlanta Federal Reserve’s GDPNow estimate.
“If we achieve sustained 3 percent growth, that means 12 million new jobs and $10 trillion of new economic activity over the next decade,” Trump said.
From The Epoch Times