US economic growth hits fastest rate since 2014

Growth in the US economy accelerated in the second quarter of the year, expanding at an annualised rate of 4.1%, official figures show.

The rate was the fastest seen since the third quarter of 2014.

Growth was boosted by consumer spending and farmers bringing forward exports of soybeans to China to beat the imposition of trade tariffs.

The annualised growth rate for the first quarter of the year was also revised up to 2.2% from 2.0%.

Figures from the Commerce Department showed that consumer spending rose at a rate of 4% in the second quarter, up from the 0.5% rate seen in the previous three months.

Exports grew at the fastest pace since the fourth quarter of 2013, as companies sought to avoid the new tariffs.

The US imposed tariffs on $34bn worth of Chinese goods from 6 July, and China responded in kind, with its tariffs targeting US soybeans and other agricultural goods.

The 4.1% growth rate for the second quarter was in line with analysts’ expectations. However, economists are not sure the economy will be able to sustain such a rate given the current trade tensions and with US interest rates on the rise

Donald Trump tweeted earlier this week that the US has “the best financial numbers on the Planet”.

That’s not quite the case and it should be said that these first estimates of economic growth are based on skimpy data. But today’s economic data is certainly good, and the president can take some of the credit.

His large package of tax cuts has boosted growth. Perversely, so did the threat of various trade rows. Just before Beijing’s retaliatory tariffs against the US started at the beginning of July, US soybean exports to China skyrocketed.

This is the first time since the 2016 election that US growth has hit the 4% target President Trump set himself during the campaign.

The latest growth number is twice what it was in the first quarter. But economists warn it’s unlikely to last.

There are worries that America’s numerous trade spats are now hitting economic growth. So what helped the economy in the first half of the year may well hurt it in the second half.