US economy likely to post fastest back-to-back growth in 4 years but outlook cloudy
Today, the Department of Commerce will release a preliminary estimate of economic growth from July 1 until September 30.
After recording robust annualised growth of 4.2% in the second quarter, the US economy is expected to have cooled in the past three months, with economists expecting a figure of 3.4% to 3.8% to be announced today. Regardless, the numbers indicate that the economy continues to perform strongly; today’s figures will mark the best back-to-back quarter growth in four years.
Expect US President Donald Trump to tout that fact repeatedly in the lead up to US midterms on November 6. Indeed, Mr Trump will hope the booming economy will persuade voters to preserve a Republican-controlled Congress.
Over the medium to long-term, the economy is on shakier ground. The US’ widening trade deficit—currently around $75 billion—will be concerning for Washington, as a decline in exports and increase in imports pulls down growth. With China the primary source of that deficit, Mr Trump may impose steeper tariffs on Chinese goods. However, as the trade war has thus far only increased the deficit, economic growth could drag in 2019.
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