Bip in the United States increased by 3.8 percent between April and June. This is a much stronger increase than expected. If you look at the entire first half of the year, there is a different picture.
The US economy grew significantly more than expected in spring. The gross domestic product increased by 3.8 percent between April and June, as the Ministry of Commerce announced. In previous estimates, a decent growth of three percent had been predicted for the period, the new estimate has now been a correction.
In the previous quarter, between January and March, the economy had shrunk by 0.6 percent. The original estimate had thus been corrected again. According to the Ministry of Commerce, the increase in gross domestic product in the second quarter is primarily due to a decline in imports and an increase in consumption. At the same time, exports and investments have dropped.
Growth only in isolation strong
Together, growth in the first half of the year remained under that of the previous year, US Federal Researcher Jerome Powell recently pointed out. The overall decline is due to lower consumer expenses. The labor market in the United States is also weakening, the unemployment rate has been climbing steadily since the beginning of the year, from 4.0 percent in January to 4.3 percent in August.
This had not become so clear for a long time, not least because an extraordinarily high increase in places was initially reported in June. When the competent authority corrected the figures enormously at the beginning of August, Trump accused her manipulation and dismissed the statistical chief.
Balance act between weak job market and inflation
In response to the weak labor market, the central bank had recently reduced the key interest rate – the first reduction since December. Central bank boss Jerome Powell had always spoken out against interest reductions over the year because this could further fuel the high inflation in the country.
Donald Trump had repeatedly attacked Powell. The US President would like significant interest rate reductions because the possibility of cheaper loans would continue to boost the economy. With the latest decision, the central bank is now trying to find a compromise between strengthening the job market and the fight against inflation.
The tariffs imposed by Trump also include this bill. Experts say that the weak first quarter can also be attributed to advanced effects: Companies have increasingly imported from abroad in order to fill their camps before the tariffs come into force.
Jerome Powell recently said that the effects of the higher tariffs have now been recognized in some groups of goods. A contradiction came from Stephen Miran, a recently appointed governor of the central bank and Trump confidante: he does not see an inflation pressure of the tariffs.
