The United States' GDP in the second quarter is almost certain to have hit four percent and might have reached five percent on the outside chance, according to estimates by economic experts.
The U.S. Department of Commerce will release the country's GDP data on July 27, but experts believe the figures will range from a near consensus four percent at the minimum to a more inconceivable 5.2 percent in the quarter ending June 30.
Experts also concur in their projections that the second and perhaps third-quarter growth numbers should be the strongest since 2014. If GDP growth somehow exceeds 5.2 percent, which was the growth rate in the third quarter of 2014, this will be the strongest growth since 2003.
The numbers reveal that growth in the first quarter was unusually weak, partly due to a slowdown in consumer spending and bad weather across most of the country. Consumer spending did rise in the second quarter, however, but not strong enough to make a difference.
Economists at British research and analysis firm IHS Markit, Ltd based in London predict real U.S. GDP growth (adjusted for inflation) will hit an annualized rate of 4.8 percent for the second quarter, and three percent for 2018 as a whole. U.S. GDP growth will then plunge to 2.7 percent in 2019 and to a measly 1.7% percent in 2020, partly as a result of a trade war against the world launched by Donald Trump in March and intensified on July 6.
"The timing of the trade war could not be worse. It is occurring as monetary stimulus is beginning to wear off, oil prices are elevated and political risks are on the rise," said IHS in their newest monthly update.
Other experts believe the improvement in America's GDP is being propelled by tax cuts benefiting the rich that went into effect this January, and the $250 billion in additional government spending for 2018. Both actions are generating a stimulus effect that will peak by yearend before dissipating in early 2019.
Analysts agree that the protectionist tariffs Trump has put in place will definitely harm growth if they remain in place or intensify. Trump insists he can accelerate GDP growth to three or four percent per year on a sustained basis, but he hasn't hit these levels and won't be able to do so in the remaining two years of his presidency, thanks to his ruinous trade war with the rest of the world.
U.S. GDP grew at a 2.8 percent annualized rate during the last 12 months (the first quarter of 2018 compared with the first quarter of 2017) under Trump's presidency. Experts don't expect it to exceed this level in the next two years.
