“U.S. Growth Hits 4.1%, Fastest Since 2014, in Win for Trump.”
The U.S. economy accelerated to a 4.1 percent pace of growth in the second quarter, the fastest since 2014, letting President Donald Trump claim a win for his policies even though expansion is projected to cool.
The annualized rate of gains in gross domestic product was just shy of the 4.2 percent median forecast in a Bloomberg survey. It followed first-quarter growth of 2.2 percent that was revised from 2 percent, the Commerce Department reported Friday. Consumer spending grew 4 percent, more than estimated, while nonresidential business investment climbed at a 7.3 percent clip.
Trump seized the chance to declare his policies, including the biggest tax overhaul since the Reagan era, a success, calling the data “amazing” and “very sustainable.” The likelihood is nevertheless that the pace of expansion will slow as the effects of tax cuts fades, companies pull back in the face of foreign tariffs and the Federal Reserve raises interest rates further.
Illustrating the volatility of some elements of GDP, net exports contributed 1.06 percentage point to the pace of growth, the most since 2013, partly on a surge in soybean shipments ahead of retaliatory tariffs. Inventories subtracted 1 point, the most since 2014, Commerce said, citing soybean stocks as well as those of drugs and sundries and petroleum and related products.
Fed policy makers are expected to continue their gradual pace of interest-rate hikes aimed at keeping the economy from overheating, without moving so fast that they could choke off growth. The dollar and yields on 10-year Treasuries declined after the report, which also showed inflation excluding food and energy was lower than estimated.
“China eyes infrastructure boost to cushion growth as trade war escalates – sources.”
China plans to put more money into infrastructure projects and ease borrowing curbs on local governments to help soften the blow to the economy from the Sino-U.S. trade war, policy sources told Reuters.
China’s trade war with the United States has clouded the outlook for the world’s second-largest economy and roiled financial markets. A sharper slowdown in the Chinese economy could fuel job losses, a concern that Beijing has raised.
But Chinese leaders have ruled out another round of strong fiscal stimulus, wary of inflaming debt risks. A 4 trillion yuan ($590 billion) spending package in 2008-09 shielded China’s economy from the global crisis but saddled local governments and state firms with piles of debt.
The amount of infrastructure spending this time will depend on how the trade war evolves, said four sources who are familiar with government policy. The sources are involved in internal policy discussions but are not part the final decision-making process.
The economy has already felt the pinch from Beijing’s multi-year deleveraging drive that has driven up corporate borrowing costs and delayed government projects. Economic growth slowed slightly to 6.7 percent in the second quarter – still above the official 2018 growth target of around 6.5 percent.
China’s infrastructure investment growth tumbled to 7.3 percent in the first half from 21.1 percent a year earlier – dragging fixed-asset investment growth to a record low – due to due to stricter checks on investment projects to curb debt risks.
“Michael Cohen claims Trump ‘knew of Russian lawyer meeting’.”
President Donald Trump’s former lawyer has said his client knew in advance of a June 2016 meeting between his aides and a Russian delegation that offered to help his campaign, US media report.
Michael Cohen says he was present when Mr Trump’s eldest son, Donald Trump Jr, informed his father of the meeting. He is reportedly willing to state this to the special counsel investigation into alleged Russian election meddling.
On Friday, Mr Trump again denied that he knew about the meeting. The meeting at Trump Tower in New York City involved Mr Trump’s son, his son-in-law Jared Kushner, then-campaign chairman Paul Manafort and an influential Russian lawyer, Natalia Veselnitskaya.
It was set up after a Russian intermediary contacted Mr Trump Jr with a promise to provide material that would «incriminate» Hillary Clinton – the Democratic candidate in the 2016 presidential election.
The president lashed out at the accusations on Friday, tweeting: «Sounds to me like someone is trying to make up stories in order to get himself out of an unrelated jam».
“Twitter Projects Users to Decline, Profit Short of Estimates.”
Twitter Inc. said monthly users dropped by 1 million in the second quarter, and predicted that number will decline further as the company continues to fight against spam, fake accounts and malicious rhetoric on its social network. The shares plunged as much as 20 percent in early trading.
Monthly active users were 335 million –a decline from 336 million in the first quarter, San Francisco-based Twitter said Friday in a statement. Though that measure was up 2.8 percent from a year earlier, the company expects monthly visitors to fall again in the current period. Twitter blamed the projected drop on intensified efforts to clean up the platform, stricter privacy rules in Europe and changes to the way its service is used through SMS messaging.
“We are confident that this is in the best long-term interest of the platform and will enable long-term growth as we improve the health of the public conversation on Twitter” and reallocate resources, including those used to prepare for the data privacy changes in Europe, Twitter said in a note to shareholders accompanying the earnings release.
The shares, which had gained almost 80 percent this year through Thursday, plunged on the report initially but pared some of those losses. They were down 12 percent to $37.63 at 9:03 a.m. in New York in premarket trading.
Twitter reported net income for the third consecutive quarter, which has helped drive the shares 79 percent higher this year to $42.94 at Thursday’s close. But the company gave a forecast for third-quarter earnings before interest, taxes, depreciation and amortization of as much as $235 million, falling short of analysts’ average estimate of $268 million.
Twitter’s user woes are similar to those of Facebook Inc., which also has been plagued by manipulation, robot accounts and unrest about the growing influence of social media in the culture. Chief Executive Officer Jack Dorsey has said his priority is to reduce abusive conversations on the platform and the company said its machine-learning algorithms are identifying more than 9 million potential spam or automated accounts a week.