The United States economy grew at its fastest pace since 2014 in the second quarter of the year, up 4.1%, helped by strong business investment, consumer spending and federal government spending, as well as a boost in exports that came in anticipation of retaliatory tariffs.
US President Donald Trump hailed the data as a victory for his economic policy in a televised speech delivered outside the White House, during which he underscored the importance that protectionist trade policies have played in revitalizing the economy.
“We opened a tremendous US steel plant. They’re opening up seven other plants and the steel industry is back – and the tariffs did it. And nobody mentions the fact that these plants are creating tremendous numbers of jobs,” the president said, suggesting that he was committed to maintaining tariffs on steel and aluminum, despite an apparent breakthrough in trade talks with Europe.
“Since I was elected we’ve added 400,000 new manufacturing jobs. Remember that was the obsolete deal. I used to say why is it obsolete? We have to make things. Manufacturing jobs are among our best jobs and we’re just getting started,” he added.
Exports grew sharply in the quarter, boosted by early shipments in anticipation of retaliatory tariffs from China, Mexico, Canada and the European Union. While those effects will subside, economists have consistently expressed confidence that tax cuts and increased government spending will continue to drive growth in the short term.
Others, including former US Federal Reserve chairman Ben Bernanke, have noted that consumer spending growth in the US is not sustainable, expressing concerns that a recession could come as soon as within the next several years when the effect of tax cuts wears off.
Trump’s top economic advisor, Larry Kudlow, voiced his disagreement with this assessment, speaking alongside the president on Friday.
“This is a boom that will be sustainable, frankly, as far as the eye can see. This is no one-shot deal,” said Kudlow.