U.S. economy slows in second quarter; weak business investment a red flag

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U.S. economic growth slows in less than expected in the second quarter as a surge in consumer spending blunted some of the drag from declining exports via ReutersTV

WASHINGTON - U.S. economic growth slowed less than expected in the second quarter as a surge in consumer spending blunted some of the drag from declining exports and a smaller inventory build, which could further allay concerns about the economy’s health.

“The key to future economic growth is business spending. Evidently, businesses do not share the ebullience consumers have,” said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles. “This is not a good sign for the economy because there would be fewer jobs for consumers. For this reason, the Fed will cut rates next week.”Gross domestic product increased at a 2.1% annualized rate in the second quarter, stepping down from an unrevised 3.

Trump, who likes to brag about the economy being one of the biggest successes of his first term, had highlighted the year-on-year growth figure as evidence of the effectiveness of his policies.

 

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