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In our news wrap Friday, the U.S. economy is showing signs of losing some steam, with growth rate down sharply in the second quarter from its level in the first.
White House economic adviser Larry Kudlow blamed Fed interest rate hikes. Meanwhile, in Hong Kong, pro-democracy protesters flooded the airport, trying to focus international attention on their cause. They plan another march Saturday.
How did business investment change in the second quarter of the year, based on the Commerce Department’s report?
According to the latest report from the Commerce Department, the United States economy grew at a slower rate than expected in the second quarter of the year. The report indicated that gross domestic product (GDP) grew at an annual rate of 2.1% in the April-June period, down from the 3.1% growth rate recorded in the first quarter.
The slowdown in economic growth was attributed to a decline in exports and a significant slowdown in consumer spending. Consumer spending, which accounts for more than two-thirds of the U.S. economy, increased by just 4.3%, down from 11.8% in the first quarter. In addition, exports declined by 5.2%, driven by decreased demand for American goods from China and Europe.
The report also revealed that business investment decreased by 0.6%, marking the first decline in three years. The decline was largely driven by a decrease in spending on structures and equipment.
Despite the slower economic growth, the report also indicated that the labor market remains strong. The unemployment rate is currently at 3.7%, near a 50-year low, and wages have continued to rise. In addition, the Federal Reserve recently cut interest rates in an effort to stimulate the economy and boost growth.
The report suggests that the U.S. economy may be facing headwinds from the ongoing trade disputes with China and other countries, which have disrupted global markets and dampened confidence among businesses and consumers. It also underscores the need for policymakers to continue to monitor the economic situation and take steps to support growth and stability.
In conclusion, the Commerce Department’s latest report indicates that economic growth slowed in the second quarter of the year, driven by declining exports and a significant slowdown in consumer spending. Despite this, the labor market remains strong, and policymakers should continue to monitor the situation and take action to support growth and stability.
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