Consumer spending boosts US economy

Higher consumer spending and business investment has helped to boost the US economy in the second quarter which grew at a rate of 2.6 percent.

The rise in second-quarter GDP was in line with economists’ expectations. President Donald Trump has set an ambitious 3 percent

growth target for 2017.

Consumer spending, which makes up more than two-thirds of the US economy, accelerated from the 1.9 per cent growth figure in the first quarter accounting for most of the upsurge.

But wage growth remains sluggish fuelling concerns spending may slow in the next quarter.

Even though hiring has been consistent and the jobless rate of 4.5 percent is the lowest in almost a decade, a sustained increase in wage growth would help boost consumers’ ability to spend.

Trade also added slightly to growth, as exports increased by more than imports during the quarter.
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