The US economy is really strong
USA: Economy is growing like it hasn't been for years
The US Department of Commerce announced on the basis of preliminary data. A growth of more than four percent is the best rate anywhere in the world that an industrialized country can currently boast. In the first quarter there was only an increase of 2.2 percent. Private consumption, which accounts for more than two thirds of the gross domestic product (GDP), has now also provided momentum. Consumers spent 4.0 percent more than before.
US President Donald Trump wants to drive growth to at least three percent with his radical tax reform. At least in the short term, he seems to be successful. The current economic situation is thus proving to be a blessing for him.
A strong economic upturn in the second quarter is not uncommon in the world's largest economy. In the past few years, growth at the beginning of the year had been comparatively weak on several occasions and the economy only picked up noticeably in the further course of the year.
In the USA, the growth figures are extrapolated to the year. They indicate how strong the economy would grow if the pace of growth continued for a year. This annualization is dispensed with in Europe. Growth figures from the USA are therefore visually higher and not directly comparable with European figures.
Is the economic engine already running hot?
But there is also growing concern that the US economy could overheat. In order to reduce this risk, the Federal Reserve is also determined to tighten the interest rate reins even further. Economists assume that the monetary authorities around Fed chairman Jerome Powell will step up two more times this year. The key interest rates are currently in a range of 1.75 to 2.0 percent. Recently, Trump broke with the tradition of US presidents and publicly criticized the politically independent Fed for the interest rate hikes.
Trump's scolding comes at an inopportune time for the Fed. Because the central bank is now focusing on the difficult question of where the summit is, said Commerzbank economist Bernd Weidensteiner. "The Fed has to answer the question of when it will stop raising interest rates." Next week it will decide again on its monetary policy.
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