The US Commerce Department reported on Friday that the GDP grew at a 4.1% rate in the second quarter of the year. Consumers spearheaded the increase, shrugging off higher gasoline prices and sluggish wage growth to step up their spending on everything from cars to clothes to restaurant meals. Government spending also accelerated at both the federal and state levels.
"Once again, we are the economic envy of the entire world," Trump declared outside the South Portico of the White House, flanked by his top economic advisers.
Business fixed investment increased 5.4% in the second quarter, down from a 8% gain in the first three months of the year.
Residential investment declined for the second straight quarter, but at a slower pace than the first quarter.
Even despite all trade war concerns, the trade gap narrowed, boosting GDP. This was offset by a downturn in inventory investment. Even so, real final sales for domestic purchasers, which excludes trade and inventories - perhaps a truer gauge of economic power - rose a strong 3.9% in the second quarter. That said, the increase could actually be a short-term result of importers snapping up US goods before looming tariffs went into effect and pushed up prices. For example, soybean exports have jumped as buyers tried to get out ahead of the retaliatory tariffs on the agriculture product by China.
Another measure of underlying demand - final sales to private domestic purchasers, which excludes trade, inventories, and government outlays - grew at a rate of 4.3%, the second-fastest since 2014.
Inflation moderated slightly. The personal consumption expenditure price index rose at a 1.8% annual rate in the second quarter, down from a 2.5% rate in the first quarter. The core rate rose at a 2% rate, down from 2.2% in the first quarter.
Most forecasters expect growth to cool in the second half of the year - even without factoring in the possibility of a trade war, which corporate executives in recent weeks have cited as a source of uncertainty that could force them to pare hiring and investment plans.
The end of the cycle is now the talk of the town. Analysts and finance execs have mentioned the "credit cycle" during earnings calls more than at any time since the last downturn, according to Sentieo.
Amid all this chatter about national economic growth and job creation and stock market records, there's evidence of more fundamental problems underlying America's economy. GDP merely measures economic output, not well-being. It gives us only a partial reading on the health of the US economy because it tells us little about which Americans are benefiting from booming output, and how much.
US businesses have long since rebuilt their balance sheets; for most of the last decade, they've raked in handsome profit. Yet workers' pay has barely grown, despite unemployment dropping far beyond expectations.
"It's economic conventional wisdom that in times like this you should prepare for the future and get your fiscal house in order, and we're really doing the opposite," said Michael A. Peterson, chairman of the Peter G. Peterson Foundation, which has long argued for reducing the federal deficit.