The U.S. economy grew at a 2.1% annualized rate in the second quarter, the Commerce Department said on Friday.
Why it matters: It's a significant slowdown from the first quarter's 3.1% growth rate, but still better than the 1.9% economists had expected. Once again, strong consumer spending offset the sharp decline in business investment and trade's drag on growth.
The government also released revised GDP figures dating back to 2014.
- Economic growth in the final quarter of 2018 was revised to a 1.1% annual rate, a much slower pace than the 2.2% originally estimated.
- If you're measuring total growth in 2018 versus total growth in 2017, the 2.9% growth rate for 2018 previously estimated remains unchanged.
The bottom line: The buoyant consumer is making up for skittish businesses, which have been thwarted by a global economic slowdown and trade war uncertainty, causing them to pull back on spending.
- Yes, but: "The consumer has been the main engine of economic growth this year, however, that should not be taken as a given going forward," Joe Brusuelas, chief economist at consulting firm RSM, writes in a note.
- "As firms facing margin compression look to try to pass along increased costs linked to tariffs downstream, our view is this may lead to slower household consumption, further limiting potential GDP growth."