The recent reports about the US economy’s second-quarter performance are not so good since it shows that the US has managed to grow at 2 percent only. The government said that the GDP of the US grew at 2 percent and this pace might be going to be there for a long time. One of the biggest reasons why the US economy is growing at a slow pace is because of trade war tension with China. Currently, both countries are in a trade war from more than eight months, and it’s affecting the country’s economy. However, the report shows a good fact that consumer spending grew beyond analysts’ expectations during spring.
However, for the upcoming quarter, a government thinks consumer spending would get decreased to 4.6% from 4.7%. Even though this downfall is not that significant, but it still leaves its impact on the US economy. Consumer outlays represent more than 70% of the total US economy activities. Trade dispute is affecting big companies and major sectors across the USA.
Decline in business investments has also revised to 1.4% from 1.1%, which is also an indication that foreign investors are now not seeking that much interest in three. Even though this drop is just temporary, it still hurts new startups and businesses which gets funding from foreign investors. Government spending has increased by a considerable margin to 4.8% from 4.5%, state and local authorities have found to be spending money on construction of roads, buildings, etc. Economists are predicting that the US will grow at this rate for the next two quarters, and the government will have to make serious changes to get ahead. The biggest problem for the US economy is an ongoing trade war with China. Unless it gets resolved, major sectors will not be able to perform right.