U.S. growth revised slightly down to 2.0 percent in Q2
Updated 14:34, 30-Aug-2019

The U.S. economy grew more slowly in the second quarter than previously thought but a bump in consumer spending helped offset other eye-catching weaknesses, according to new data released Thursday.

The revised figures confirmed the slowdown from the start of the year, with far weaker housing, oil exports, tourism and local government spending.

It also underscored the challenges facing U.S. President Donald Trump, who is touting his economic policies as he seeks reelection while pursuing a grinding trade war with China.

The U.S.' GDP expanded 2.0 percent in the April-June period, down a notch from the initial 2.1 percent growth estimate reported last month, and well below Trump's 3.0 percent target, according to the Commerce Department report.

People shop along Broadway in lower Manhattan on May 30, 2019 in New York City. /VCG Photo

People shop along Broadway in lower Manhattan on May 30, 2019 in New York City. /VCG Photo

Recession indicators in recent weeks have begun to flash warning signs, and though the American economy is still outpacing the rest of the industrialized world, it has begun to sputter worryingly in some areas.

Consumer spending remains robust and corporate profits rose in the second quarter, after falling at the start of the year, but business investment is floundering, according to the report.

And the U.S.-China trade war could darken the picture in the third quarter as several companies warned in their earnings reports on Thursday that Trump's latest round of China tariffs were a threat to profits, echoing urgent pleas from several industry groups.

Clothing retailer Abercrombie & Fitch said two coming waves of tariffs should wipe out about six million U.S. dollars in profit in the fall shopping season.

RDQ Economics said the latest GDP numbers were "the proverbial mixed bag."

"The domestic economy appears to be fairly strong but the mix of growth between consumer and investment spending is not healthy from a supply-side perspective with investment spending stalled out," the firm said.

While largely confirming economists' expectations, the revised second quarter GDP numbers nevertheless marked a sharp slowdown from the heady pace of growth at the start of the year.

Unemployment remains low but hiring has slowed in 2019 and business investment has dropped sharply while the manufacturing sector is already in recession.

(Cover: Shipping containers are stacked at the Paul W. Conley Container Terminal in Boston, Massachusetts, U.S., May 9, 2018. /Reuters Photo)

Source(s): AFP