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The first estimate indicates that economic activity grew at an annualized rate of 4.1%. This is the highest rate for nearly four years. But the big question is whether it can be maintained above 3%, as promised by President Donald Trump, or it will moderate to a level closer to its potential, by 2.5% , since part of the momentum is attributed to soy exports in anticipation of the Chinese tariff
The recovery is solid compared with 2.2% in the first three months of the year. year, and she is known only three months before the legislative elections. In the previous three quarters, the 3% that sees the Republican president and who needs to generate income in order to pay the measures of his economic plan, such as tax reduction. The best quarter so far of recovery after the crisis was the third quarter of 2014 (it rose 4.9%).
Private consumption, which accounts for two-thirds of the economy, is reinforced by growth of 4% from an anemic of 0.9% in early 2018. It's a rate above the average of 2.6% in recent years and which the President can attribute to his tax incentives. A job market in full employment, rising wages, tax cuts and the rebounding of confidence are livelihoods. Business investment made 7.3%, moderate against 11% of the first
The strength of the indicator lies in the level of tolerance of the Federal Reserve, which is expected to meet soon. What is expected is to leave the interest rates intact between 1.75% and 2%, where they have been since June after seven increases since December 2015.
Trump commented publicly, there is few days, that he was not happy with this progression in the price of money, although at the same time said that the economy is better than ever. "The pace is incredible," said the president, "we are the economic envy of the world". On the eve, he said that he would be happy with growth close to 4%. The Wall Street consensus predicted a rate close to 4.4%.
Trump, accompanied by his economic team, said that EE. UU is on track to reach the highest level of growth in 13 years in 2018. "It will be above 3%," he predicted, "and if that continues, the economy will double in size in 10 years . "
The Fed is expected to make two further quarter-point increases this year, in September and December, after the mid-term elections.
The rhetoric of the Republican therefore leaves no room for the team led by Jerome Powell to pursue the plan of gradual withdrawal of stimuli to prevent the overheating of the economy and demonstrate at the same time that this Is not influenced by political pressures
The solid growth data is published coinciding with a more aggressive attitude of Trump in the field of trade. Rising costs due to tariffs and the appreciation of the dollar force multinationals to revise downward their forecasts of activity
© SANDRO POZZI
Ediciones El País, SL 2018
@el_pais
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