US economy grows at fastest pace since 2014
JPMorgan Chase Chief Economist Anthony Chan breaks down the second-quarter GDP and the outlook for the U.S. economy.
U.S. gross domestic product advanced by 4.1% in the second quarter, the fastest pace of economic expansion since 2014 – when third-quarter growth reached 5.2%.
After the GDP report was released President Trump tweeted, "Great GDP numbers just released." In a press conference at the White House Trump said annual GDP growth "will be over 3%."
The Trump administration has implemented pro-growth policies, including a sweeping tax reform package meant to bolster businesses. The last time annual GDP growth was above 3% was in 2005 when it came in at 3.3%. George W. Bush was president when the U.S. economy hit this growth rate. The best annual GDP reading under President Barack Obama was 2.9%.
GDP is a measure of a country’s economic output – and is made up of personal consumption, business investment, government spending and the difference between exports and imports.
Economic growth depends a lot on how consumers and businesses feel about the economy. When individuals are positive about their finances they are more likely to spend, and the same goes for businesses. Tax reform was meant to boost both individuals and businesses, lowering the corporate tax rates to increase the money businesses have to invest in growth while also increasing take home pay for many Americans. The latest GDP reading suggests that this strategy is working.