US economy grew 4.2pc in Q2

Washington : The roaring growth recorded by the US economy in the second quarter was even faster than first reported, with new numbers showing a bigger boost in corporate spending, the government reported yesterday. The uptick in estimates of second quarter spending by companies was sure to comfort President Donald Trump and supporters of December’s sweeping corporate tax cuts who argue that lowering corporations’ tax burdens will spur investment and growth.

Gross Domestic Product advanced at an annual rate of 4.2 percent in the April-to-June period, a tenth of a point faster than initial estimates showed last month and still the fastest growth in almost four years, according to the Commerce Department. Economists had been expecting a slight downward revision during the quarter. Many economists view the second quarter growth as a blip, juiced by one-off factors unlikely to be sustainable, and estimates for growth in the third quarter now hover around a still-robust three percent.

But Trump last month hailed the economy’s renewed vigor, claiming credit for boosting growth above all with tax cuts and by aggressively confronting trading partners. Still, much of the second-quarter boom was due to a boost in exports as merchants raced to buy American goods -- principally soybeans and petroleum -- ahead of China’s retaliatory tariffs that took effect in July. The pendulum is expected to swing in the other direction in coming months.