The economy grew at a 2.1% annualized rate in the second quarter, the Bureau of Economic Analysis reported Thursday morning in a preliminary report on gross domestic product.
Forecasters had expected GDP growth to slow from 3.1% in the first quarter to slightly below the 2% mark. The Trump administration has promised sustained 3% annual growth.
With the growth recorded in the second quarter, the economic recovery has now hit the 10-year mark — it began in June 2009, by the National Bureau of Economic Research’s reckoning. It’s also the longest recovery in U.S. history, eclipsing the 1991-2001 recovery by one month as of July.
One negative indicator in Friday’s report is that business investment growth stalled out and turned negative for the first time in the Trump era. Republicans have aimed to boost business investment, especially through the 2017 tax cuts.
Overall, however, the report indicates that underlying growth is stronger than the headline 2.1% growth rate suggests. Consumer spending grew at a strong 4.3% rate, and overall demand appeared to be strong.
Friday’s report is one of the most important indicators that Federal Reserve officials will assess when they meet in Washington, D.C., for a two-day monetary policy meeting. Investors expect Chairman Jerome Powell and other Fed officials to cut their interest rate target by at least a quarter percentage point in an effort to keep the recovery running as fast as it can, and perhaps even to cut it by half a percentage point.
Apart from the GDP statistics, job figures indicate that the economy remains strong. Employers have added an average of 171,000 jobs a month over the past quarter, nearly twice as many needed to keep unemployment trending down. Applications for unemployment insurance, too, remain historically low, suggesting that job growth will remain high.
