Jul 26, 2019

U.S. GDP growth slows to 2.1% in the 2nd quarter

Data: Bureau of Economic Analysis; Chart: Chris Canipe/Axios

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."

Go deeper

The cost of the "strong" U.S. economy

Data: Bureau of the Fiscal Service; Chart: Harry Stevens/Axios

Despite massive amounts of money being pumped into the economy by both fiscal and monetary policy, U.S. growth is slowing, not accelerating.

Why it matters: Last year Congress signed a 2-year agreement to increase spending $300 billion, in part to pull the economy out of its slow-growth malaise following the financial crisis and put the U.S. back on track for 3% annual growth or higher.

Go deeperArrowAug 13, 2019

The buyback slowdown could spell trouble for the economy

Illustration: Rebecca Zisser/Axios

After buying back more than $1 trillion of their own stock last year, public companies are slowing their share repurchases in 2019, and that will add to troubles for the market and the economy.

Why it matters: Buybacks have been a major catalyst for the market’s rise in recent years and remain an important driver of higher prices, as earnings growth has slowed and investors have become net sellers of equities.

Go deeperArrowAug 8, 2019

U.S. labor market chugs on with 164,000 jobs added in July

Under the graphic paste -> Data: Bureau of Labor Statistics; Chart: Axios Visuals

The U.S. economy added 164,000 jobs in July — right in line with economists' expectations of 165,000 jobs— the Labor Department said on Friday, while the unemployment rate held steady at 3.7%.

Why it matters: The labor market is still the standout of the record long economic expansion, although cracks are beginning to show. The pace of job growth is slowing down, as the government revised its previous predictions to show that the market had added 41,000 fewer jobs than initially estimated over the last two months.

Go deeperArrowAug 2, 2019