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United States GDP Numbers Show Slowdown in Q2 2019

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

On Friday (26 July 2019), the US GDP figures were released for Q2 2019. GDP for Q2 2019 shows that the US economy grew at an annual rate of 2.1 per cent, down from Q1 2019 of 3.1 per cent annual growth. This result was slightly above market expectations (Dow Jones estimates), with the market estimating 2.0 per cent annual growth for Q2 2019.


Consumer spending growth was stronger than expected with 4.3 per cent annual growth, while the estimate was 4.0 per cent. As consumer spending accounts for two-thirds of economic activity, this is a very positive result for the US economy. The main reason for the strong increase in consumption growth was the Trump tax cut, which allowed for further growth in consumer spending.

The main disappointment from the Q2 results is that private business investment dropped 5.5 per cent in Q2 compared with Q1. This is mainly due to weak private investment into infrastructure. Another reason for the slump in investment is continued concerns in the business world surrounding the back and forth nature of the US and China trade war.

Overall, in the last decade, the US economy has seen one of the longest periods of continued US expansion in history. However, this expansion has been relatively weak, with GDP fluctuating around 2.5 per cent growth.




This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

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ASR has no position in any of the stocks mentioned.

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