US economy boosted by falling US dollar and rising oil prices
+ INFOGRAPHY. US GDP grew by 2.7% in the second quarter – a performance twice as good as the previous quarter. The drop in the US dollar boosted exports, which rose faster than imports in the last three months.
It is a little comfort after a disastrous week: Donald Trump, who has lost all chance of abrogating the Obamacare this summer, can at least take advantage of the economic health of the country. US growth grew by 2.6% in the second quarter (on an annualized basis), a performance more than twice that of the previous one and which owes as much to the dynamism of the companies as that of the households.
They spent 2.8% more than they did between January and March. Their optimism peaks, which had been equaled only once in the last fifteen years, according to the index published monthly by the Conference Board. The political blockade in Washington does not appear to have any effect on household morale.
Trust seems to have returned to the business side
Confidence also seems to have come from the companies, which are stealing from record to record on Wall Street and taking advantage of the fall of the dollar to increase their exports. The renewed growth in Europe and Asia is helping them all the more. Over the past three months, US exports have grown faster than imports. The trade balance contributed to growth (+0.2 points), despite the fact that it has been amputating it in recent quarters.
This is good news for Donald Trump who promised to reduce the country’s trade deficit. But the performance owes much more to global phenomena (exchange rate , global growth) than to the White House’s trade policy. The upturn in oil prices also pushed energy companies to reactivate their extraction projects, which is a delight for steelmakers and equipment manufacturers.
Not certain that the dynamics persist
However, it is not certain that the dynamics persist. The US economy has been doing yo-yo since the end of the crisis. The first quarters of the year are constantly bad, and followed by more buoyant spring. 2017 does not deviate from the rule.
One of the slowest growth cycles
As reassuring as it is, US growth remains well below the pre-crisis level . The growth cycle is certainly one of the longest in America. But it is also one of the slowest. The average growth observed since 2008 is just over 2%. It was 3.6% in the 1990s and almost 5% in the 1960s.
Growth can not exceed 2% because there is no labor force that would support the movement.
Donald Trump, who promised an annual GDP of 3%, remains far from his goal. Virtually no economist believes in it: ” The economy is approaching full employment. Growth can not exceed 2% because there is no labor force that would support the movement, “says Patrick Newport, economist at IHS Markit. The only way to achieve this would be to improve the productivity of American employees . But it remains desperately weak, even negative: it fell again by 0.6% in the first quarter, a negative performance in any other major Western power.