US economic growth revised down slightly in Q2

President Jair Bolsonaro came to power in January with an ambitious plan to spur Brazil's economic activity

Gross domestic product increased at a 2.0% annualized rate, the Commerce Department said in its second reading of second-quarter GDP on Thursday. Yet the main driver of growth, consumer spending, remains vigorous enough to keep the economy growing steadily, if still modestly.

"As a result, we expect GDP growth to slow further in the third quarter, as relatively firm USA consumer spending fails to compensate for the weaker business outlook and slowing investment".

The U.S. economy grew at a rate of 2% in the second quarter, substantially slower than the first quarter and a tick weaker than the government's initial estimate for the period.

"These data suggest any further (growth) slowdown in the third quarter will be modest", said Paul Ashworth, chief US economist at Capital Economics in Toronto.

But an inverted yield curve (meaning that short-term interest rates for financial products are higher than long-term interest rates for such products) is, according to many economists, a sign of an economic slowdown - and data released by the Commerce Department on Thursday shows that growth for the US during 2019's second quarter was 0.1% less than originally thought.

The economic expansion, now in its 11th year, is under threat from the Trump administration's year-long trade war with China, which has undercut business investment and manufacturing.

While unemployment remains low, hiring has slowed in 2019, and business investment has dropped sharply.

The GDP report showed the trade deficit widened to $982.5 billion in the second quarter instead of $978.7 billion as reported last month.

The deterioration in trade relations between the two economic giants has roiled global stock markets and triggered an inversion of the U.S. Treasury yield curve, fanning fears of a recession.


Federal Reserve Chair Jerome Powell told a conference of central bankers last week that the economy was in a "favorable place", but reiterated that the USA central bank would "act as appropriate" to keep the economic expansion on track.

A slowdown in annual growth to 2.2% would be near the 2.3% annual gains seen since the decade-long expansion began in June 2009.

"But the economy is still soft and Copom is still likely to cut interest rates by a further 50 basis points when it meets next month", he said, referring to the central bank's rate-setting committee.

Gross domestic product grew 2% from April to June, down from the original estimate of 2.1% that was released in July.

In the April-June period, consumer spending shot up to an annual rate of 4.7 percent, the best showing since the final quarter of 2014.

The contribution to the quarterly rate of growth in GDP from government spending was also marked down, from 0.85 points to 0.77. They are forecasting that growth will slow even further next year and they say a recession can't be ruled out. Talks between the two have deteriorated in recent months as the two impose retaliatory tariffs on each other.

A report from the Labor Department on Thursday showed the number of Americans filing for state unemployment benefits increased 4,000 to a seasonally adjusted 215,000 last week.

Business investment declined at an unrevised 0.6% rate in the second quarter, the first contraction since the first quarter of 2016.

Tourism and travel was another sore spot, as falling revenues from foreign visitors helped shave a half percentage point off growth in services exports, hitting hotels, restaurants and tourist attractions.

Related News:



Most liked

Police unsure why man went on West Texas shooting rampage
Authorities have not publicly identified the seven deceased victims, but Gerke said Sunday that they ranged in age from 15 to 57. The gunshots struck one of two troopers inside the patrol vehicle , after which the gunman fled and continued shooting.

'Numerous fatalities' reported in boat fire off coast of Southern California
The Ventura County Fire Department said it responded to a report of a dive boat on fire around 3:30 a.m. (6:30 a.m. "We are not sure where it falls jurisdictionally; it's Coast Guard , Santa Barbara or Ventura", he said.

Wall Street swings to split finish ahead of tariffs
Gold fell $12.30 to $1,526.50 per ounce, silver dropped 15 cents to $18.17 per ounce and copper added 1 cent to $2.56 per pound. Ulta Beauty Inc tumbled 28.8%, to the bottom of the S&P 500, after the cosmetics company cut its full-year profit forecast.

Iran shows off undamaged satellite after Trump leaks United States surveillance secrets
President Donald Trump on Friday said that the United States had nothing to do with Iran's Safir satellite rocket failure. But it's not clear how the image made it from an intelligence briefing into the commander-in-chief's Twitter feed.

James Anderson out of Ashes due to calf injury
Two of the right-arm pacer's three Tests have been against Australia in Adelaide and Perth from which he took six wickets. Watch the fourth Ashes Test between England and Australia live on Sky Sports The Ashes from 10am on Wednesday.

Saudi-led airstrikes kill at least 60 at rebel-run prison
Local residents said the center also held their imprisoned family members, arrested for being critical of the Houthis. Office of the High Commissioner for Human Rights confirmed that 52 detainees are among the dead.

US Open 2019: Djokovic in ‘constant pain’ for weeks with shoulder issue
I realised when I came to practice that I was moving well, so I was quite confident that I was going to bring a good level tonight.

Eric Gordon, Rockets Agree to Extension
Gordon has averaged 16.7 points in 11 National Basketball Association seasons with the Clippers, Hornets/Pelicans and Rockets . Gordon will assume the sixth man role once again this season and will look to be the third member of the fantastic backcourt.

Novak Djokovic retires during fourth-round clash against Stan Wawrinka
Djokovic entered the night with a 19-5 head-to-head edge against Wawrinka across their careers. Djokovic won that one in an unprecedented fifth-set tiebreaker after almost five hours.

Elliott set to miss opening weeks of NFL season - Jones
Through three seasons, Elliott has carried the ball 868 times for 4,048 yards with 28 rushing touchdowns. "Well, Mr. The Cowboys open the regular season September 8 against the New York Giants .

Is President Trump falling out of love with Fox News?
After one hostile tweet, Smith addressed one viewer Wednesday by looking at the camera and saying, "Good afternoon, Mr. Our job is to keep score, not settle scores. "But you are the president".

Dallas Cowboys' Ezekiel Elliot Fired by Jerry Jones Indirectly?
The first two backs behind Elliott - rookie Tony Pollard and veteran Alfred Morris - didn't play against the Buccaneers. Elliott has been absent throughout training camp and the preseason, working out on his own instead in Mexico.

Pope says got stuck in Vatican lift, freed by fireman
Apparently regarding electrical energy, Francis mentioned a "drop in tension" led to the elevator to dam. He mentioned that Holy See firefighters rescued him and requested the folks in the sq.to applaud them.

Climate activist Greta Thunberg due in United States after Atlantic crossing
Thunberg has been accompanied by her father, Swedish author Svante Thunberg and a cameraman/documentary filmmaker Nathan Grossman. As she passed the Statue of Liberty, her boat was met by a flotilla of 17 sailboats sent by the United Nations.

At least 13 killed in explosion at a chemical factory in Shirpur
Meanwhile, Chief Minister Devendra Fadnavis and Union Home Minister Amit Shah have tweeted about the incident. Several teams of police, disaster management, fire brigade were conducting rescue operations at the site.