Catherine Rampell correctly notes:
“There are a lot of
idiosyncratic factors that juiced growth last quarter. One is that growth was
relatively disappointing at the beginning of the year and was due for a
rebound. Again, the numbers are noisy.
But another major
factor is that businesses freaking out about Trump’s trade war likely pulled
forward some of their activity. That is, as Morgan Stanley chief U.S. economist
Ellen Zentner puts it, they “doomsday prepped” by stockpiling raw materials, intermediate
goods and finished products before tariffs raised costs on all those things.
Soybean exports
surged, for example, as companies raced to beat retaliatory tariffs that went
into effect this month. The jump in soybean exports alone probably added 0.6
percentage points to GDP growth in the second quarter, estimates Ian
Shepherdson, chief economist at Pantheon Macroeconomics.”
UPDATES:
Long-Term GDP
Revisions:
https://www.nytimes.com/2018/07/27/business/economy/revised-gdp-report.html
GDP Isn’t Growing Fast Enough for Markets
U.S. GDP Report Clears Path for Two More Fed Rate Hikes
https://www.bloomberg.com/view/articles/2018-07-27/u-s-gdp-report-clears-path-for-two-more-fed-rate-hikes
https://www.bloomberg.com/view/articles/2018-07-27/u-s-gdp-report-clears-path-for-two-more-fed-rate-hikes