US economy slowed in Q2, but consumer spending fends off downside risks

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US economy slowed in Q2, but consumer spending fends off downside risks

On Thursday, the 29th of August 2019, data revealed by US Commerce Department had reaffirmed that the US economy had fallen short of Trump Administration’s GDP (Gross Domestic Product) growth target of 3 percent during second quarter of the year, nonetheless, a much robust consumer spending hitting its 4-1/2 year peak in the wake of a solid labour market with unemployment rate hovering near almost fifty-year low to 3.7 per cent, had been striving to offset deadly impacts of a yearlong China tariff war entering into its second year.

Apart from that, other US data revealed on Thursday (August 29th) had rekindled hopes of averting an imminent recession, as trade deficit had narrowed sharply in July while US exports had also witnessed a rebound. On top of that, US businesses had shored up inventories last month, triggering possibilities that the consumer demands might remain strong.

Nonetheless, according to Thursday’s (August 29th) revised GDP data for Q2, 2019, US economy grew at a pace of 2.0 percent between April to June, down from a prior figure of 2.1 percent, while first quarter had scored a GDP growth of 3.1 percent.

Altogether, US GDP grew at a pace of 2.6 per cent this year so far, far behind US President Donald Trump’s target of 3 percent what he had pledged during 2016 electoral campaign. Meanwhile, adding that the US economy may not out of control yet, a chief economist at MUFG in New York, Chris Rupkey said on Thursday’s (August 29th) market closure, “The economy is still on cruise control and growing at a slow but steady pace that looks sustainable as the trade wind skies continue to darken”.