A sharp drop in imports triggered by President Donald Trump tariff policy helped boost US economic growth between April and June, according to the latest figures.
The world’s largest economy expanded at an annual pace of 3% after shrinking in the first three months of the year, the Commerce Department said.
The bigger-than-expected rebound reflected swings in trade as businesses rushed to get goods into the US ahead of Trump’s tariffs and is not necessarily an indication of the health of the wider economy.
Nevertheless, the US president used the data to take aim at Jerome Powell, chair of America’s central bank, ahead of a decision on interest rates later on Wednesday.
Using his “Mr Too Late” nickname for Federal Reserve chair Powell, Trump wrote on social media that the economic figure was “WAY BETTER THAN EXPECTED! ‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!”.
But analysts said the rebound in growth was likely to bolster arguments that the bank could afford to wait to cut interest rates.
Bernard Yaros, lead US economist at Oxford Economics, said: “The economy’s resilience will allow the Federal Reserve to hold still and assess the unfolding tariff impact on consumer prices before pivoting to interest rates cuts in December.”
A separate gauge that tracks consumer spending and investment slowed from 1.9% to 1.2%, the Commerce Department said.
Some economists have argued that this measure is a more helpful indicator, given the fluctuations in trade.
“Beneath the topline figure, the economy is switching to a lower gear but not going in reverse,” said Mr Yaros.