Trump effect? Yeah, I think so. One of the most significant parts of this is that corporate investment is growing strongly. Business leaders get that the era of over-regulation is over and their taxes might be going down.
The second quarter is the first one that is more a Trump quarter than an Obama quarter, though of course we’ll be saddled with Obama’s lousy economic program for a long time. Two and half percent is not great, but it’s not bad, and it is a full point above average economic growth during the Obama administration and half a point above the “Obama recovery” era.
As excerpted from the Wall Street Journal:
Gross domestic product, a broad measure of goods and services produced in the U.S., rose at a 2.6% annual rate in the April to June period, the Commerce Department said Friday.
The second-quarter advance is a welcome rebound after a lackluster start to the year, when GDP grew at only 1.2% pace. It is less clear if stronger growth is a sign of momentum or simply repeating a familiar pattern of weak winters followed by a stronger spring and summer.
Details within Friday’s report were generally positive.
Both consumers and businesses helped propel growth in the second quarter.
Household outlays rose at a 2.8% pace, an improvement from the first quarter’s 1.9%. Consumers stepped up spending on both goods and services, possibly reflecting a broadly positive outlook since the election. The Conference Board’s index of consumer confidence in July rose to the second-highest level in 16 years.
Businesses also have been upbeat. A measure of corporate spending on projects, nonresidential fixed investment, climbed at a 5.2% pace. While that was down from the first quarter’s 7.2%, it is still one of the best readings since 2014.