Consumer spending continues to fuel growth

Associated Press

WASHINGTON

The U.S. economy revved up this spring after a weak start to the year, fueled by a surge in consumer spending. But the growth spurt still fell short of the optimistic goals President Donald Trump hopes to achieve through tax cuts and regulatory relief.

The Commerce Department said Friday that growth in the gross domestic product, the economy’s total output of goods and services, expanded at a 2.6 percent annual rate in the April-June quarter. That’s more than double the revised 1.2 percent pace in the first quarter.

The improvement was powered in large part by robust consumer appetite for items such as clothing and furniture.

The 2.6 percent GDP gain came in close to economists’ expectations.

“Consumers continue to drive the economy’s growth, but firmer business investment is also a plus,” said Mark Zandi, chief economist at Moody’s Analytics. “Weaker housing construction was the only significant drag on growth in the quarter.”

Trump campaigned on a pledge to boost growth to rates of 4 percent or better. So far, his economic program has not advanced in Congress. But on Friday he still hailed the latest acceleration in growth.

“GDP is up double from what it was in the first quarter – 2.6 percent,” Trump told a crowd in New York. “We’re doing well. We’re doing really well. And we took off all those restrictions.”

Trump told the crowd he was proud that he had appointed wealthy people to his Cabinet, including Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin.

“I want a rich guy at the head of Treasury. I want a rich guy at the head of Commerce,” Trump told the audience on Long Island. “We’ve been screwed so badly on trade deals. I want people that made a lot of money now to make a lot of money for our country.”