Economic growth seen stumbling as trade tensions hit companies
Trade tensions likely helped push down U.S. economic growth last quarter to match the slowest pace of Donald Trump’s presidency, with a robust consumer keeping things from looking even worse.
Gross domestic product figures due Friday will likely show business investment weakened, despite getting a late-quarter boost from higher equipment orders in June. Uncertainty from the yearlong U.S.-China tariff war compounded weakness stemming from slowing global growth and falling oil prices.
GDP rose 1.8% on an annualized basis in the second quarter, according to the median projection of analysts, which would be the slowest since 2017.
Net exports and inventories probably took a substantial bite in the April-June period, unwinding gains from the first quarter and reflecting fluctuations in companies’ stockpiles -- before and after various Trump tariff deadlines.
Together those items undercut what likely was the strongest increase in consumer spending since 2014. Continued solid gains in jobs and wages prevented growth from sinking into the doldrums -- at least for now.
‘‘The biggest factor weighing on growth is a rather sizable swing downward in inventories and net exports -- so they were the biggest contributors in the first quarter and they’ll be the biggest drag on the second quarter,” said Ellen Zentner, chief U.S. economist at Morgan Stanley.
https://www.msn.com/en-us/money/markets/economic-growth-seen-stumbling-as-trade-tensions-hit-companies/ar-AAEQmk4?li=BBnb7Kz
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