U.S. GDP Was Revised Down To 2%, And The Impact Of Trade War Offset The Growth Of Consumer Spending

In the second quarter of this year (2019), the growth rate of gross domestic product (GDP) in the United States was revised down to 2.0%, less than the initial value of 2.1%, indicating that the trade war is hitting the US economy.

The Commerce Department said GDP grew at an annual rate of 2.0% in the second quarter, in line with analysts' expectations, but less than the initial 2.1%. Consumer spending, which accounts for two-thirds of the economy, jumped 4.7%, the biggest increase since 2014, but exports, inventories, residential investment and state and local government spending fell, offsetting the strong growth in consumer spending.

The latest data highlights that the economic growth target of 3% of trump is even more far away. With the new tariff on the road on September 1, it may further impact the economic outlook. Not only have bond yields plummeted, but economists have also predicted that growth will falter in the second half of this year, and have put a bet on the end of the longest economic expansion momentum in U.S. history in the next 12 months.

Personal consumption expenditure contributed 3.1 percentage points to GDP growth, which was 2.85 percentage points higher than the initial value; the growth rate of net output GDP decreased by 0.72 percentage points, exceeding the decrease of 0.65 percentage points when the initial value was announced, indicating that the impact of trade war such as enterprises' delay in investment and enterprises' beginning to transfer costs to consumers has already taken place.

The employment data released by the U.S. Department of labor showed a robust performance, with 215000 people applying for unemployment benefits for the week ending August 24, an increase of 4000, in line with market expectations and the four week moving average.