GDP growth decelerated in the second quarter, but not as dramatically as was predicted by analysts concerned about the effects of tariffs and a global economic slowdown, the Commerce Department reported Friday.
America’s GDP increased by just 2.1 percent in the second quarter, down from 3.1 percent in the first quarter, and the lowest single-quarter rate since President Trump took office in January 2017.
Trump suggested in a Friday morning tweet that the second-quarter numbers were relatively strong given the Federal Reserve’s tight monetary policy, which he has repeatedly railed against as a threat to the booming economy he’s enjoyed since taking office.
Q2 GDP Up 2.1% Not bad considering we have the very heavy weight of the Federal Reserve anchor wrapped around our neck. Almost no inflation. USA is set to Zoom!
— Donald J. Trump (@realDonaldTrump) July 26, 2019
White House economic adviser Larry Kudlow echoed the president’s sentiments during a Friday CNBC interview.
“I think it’s almost a miracle that the economy is growing as rapidly as it is,” Kudlow said. “This has not been easy with seven rate hikes.”
Consumer spending accounted for much of the second-quarter growth and provided a counterbalance against sluggish business investment, which came in at -0.6 percent for the quarter, the lowest figure seen since the first quarter of 2016.
The report was released just as Trump announced that Apple will not be exempted from the steep tariffs imposed on MacBook Pro parts made in China. Apple petitioned the administration for an exemption, citing the tariffs’ negative impact “on Apple’s global competitiveness.”
High-level trade talks between China and the U.S. are expected to begin next week in Shanghai. It will be the first time the two nations’ chief negotiators have met since late June.
Fed Board of Governors members have expressed concern about a significant economic downturn and are expected to cut the benchmark interest rate by a quarter percentage point at their policy meeting next week.