Economy grew 4.2 pct. annual rate
WASHINGTON — The U.S. economy grew at a strong 4.2 percent annual rate in the April-June quarter, the best showing in nearly four years, as growth stayed on track to produce its strongest full-year gain in more than a decade. Strength in business investment offset slightly slower consumer spending.
The Commerce Department on Wednesday revised up its growth estimate for last quarter from an initial estimate of a 4.1 percent annual rate. The second quarter marked a sharp improvement from a 2.2 percent gain in the January-March period, though some of the strength last quarter came from temporary factors, including a surge in U.S. exports before tariffs were to take effect.
Economists expect growth to slow to a still solid 3 percent annual rate the rest of the year, resulting in full-year growth of 3 percent for 2018. It would be the best performance since 2005, two years before the Great Recession began.
The 4.2 percent annual growth that the government estimated for last quarter is the strongest such figure since a 4.3 percent annual gain in the third quarter of 2014. The expectation of 3 percent growth for 2018 as a whole would be up from gains of 1.6 percent in 2016 and 2.2 percent last year.
Since the recovery began in mid-2009, growth has been sub-par, with annual gains averaging just 2.2 percent, making it the weakest recovery in the post-war period.
Other sources of strength were less growth in imports, which subtract from GDP, and faster growth in government spending at the federal and state and local levels.