Four years of US growth threatened by slowing investment spending

SCapital spending at the end of the summer shows that the US economy could slow more than expected since the four-year summit this spring, as President Trump stepped up a trade war.

Jan Hatzius, an economist at Goldman Sachs, wrote Thursday in a report that Goldman Sachs economist Jan Hatzius wrote in a report that orders for capital goods without planes decreased by 0.5 % in August and shipments increased only 0.1%. While 4.5% growth in global orders exceeded expectations, the details "show signs of slowing demand," said Jonathan Millar of UK lender Barclays Plc.

Investment bank Morgan Stanley is now forecasting economic growth of 2.7% in the three months to September, compared with a previous forecast of 3.4%, economist Ellen Zentner wrote in a report. This compares with the most recent estimate of 4.2% growth over the three months to June, released on Thursday, reflecting a decline in imports and an increase in public spending since the beginning of the year. # 39; year.

A day earlier, the Federal Reserve's monetary policy committee had cited strong growth in raising interest rates for the eighth time since its narrowing to near zero during the 2008 financial crisis, in a range from 2 to 2.25%.

President Jerome Powell said gross domestic product for the full year 2018 could grow by 3.1% over last year, despite growing concerns from business on protectionist trade policies of Trump.

"We have a really solid economy in our hands," Powell told a news conference. "If we feel that the economy is reacting badly, then we will certainly react to that."

The Fed chairman, appointed by Trump to succeed Janet Yellen, noted business concerns, but said the harm they feared has not materialized yet. Both business leaders and private economists have warned that the White House's antagonism to allies such as Canada and competitors such as China could undermine the benefits of tax cuts. last year.

In addition to double-digit tariffs on Chinese imports of $ 250 billion, Trump has threatened to acquire up to $ 267 billion more, accompanied by a 25% tax on automobiles and parts of vehicles. for the USA

Auto industry leaders told the Senate Finance Committee Wednesday that tariffs would hurt profits and raise prices for buyers. Consumer companies, from cosmetics company Estee Lauder to electronics giant Best Buy, who had previously benefited from the collapse of buyers, fear the same.