Economic growth increased by an impressive 4.1 percent during the second quarter of this year, the highest rate in nearly four years, according to the Bureau of Economic Analysis (BEA).
The last time the economy grew at a higher rate was the third quarter of 2014, when it reached 5.2 percent. But the economy was sluggish, with millions of Americans having stopped even looking for jobs when President Donald Trump took office in January 2017.
Trump made growth through tax cuts, regulatory reform, and the elimination of foreign tariffs on U.S. exports a cornerstone of his presidency with his promise to help workers and employers.
He has seen economic growth strengthen and business confidence increase since the start of his presidency, largely due to a massive deregulatory program that has significantly reduced federal red tape, and to the December 2017 tax cuts, which were the biggest in U.S. history.
The BEA previously found that economic growth increased at an annual rate of 2.2 percent during the first quarter of 2018, based on the Gross Domestic Product (GDP). Economic growth also increased by 2.9 percent in the fourth quarter, 3.2 percent during the third, and 3.1 percent during the second quarter of last year.
The GDP tracks the total dollar value of all goods and services produced over a specific time period and is commonly used to determine the economic performance of a country or region.
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The growth reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending. Those, however, were offset in part by negative contributions from private inventory investment and residential fixed investment alongside an increase in imports.
Personal incomes nationally increased $183.7 billion compared with an increase of $215.8 billion in the first quarter. The slowdown in wages and salaries, government social benefits, personal interest income, and nonfarm proprietors’ income were partly offset by accelerations in personal dividend income and rental income, a deceleration in contributions for government social insurance and an upturn in farm proprietors’ income.
The Great Recession of 2008 and the sluggish recovery that followed hindered economic growth throughout much of the past decade. The unemployment rate fell to its lowest level since 2000 at 3.8 percent in May.
The stock market has been seeing record gains with a steep rise that started right before he entered office. There has also been a record high in job openings, with 6.7 million unfilled positions in June. That month saw more job openings than people unemployed for the first time since 2000.
Trump and congressional leadership have looked to improve the economy through deregulation and tax reform. Their hope has been to decrease tax and regulatory burdens so employers have more time and resources to invest into their businesses and employees.
Related: Dem Credits Obama for Trump Economy While Unveiling Jobs Plan
Obama has been credited by some for the improving economy since some of those trends started towards the end of his presidency. House Minority Whip Steny Hoyer (D-Md.) recently credited the former president for the improving economy while unveiling an update to his job growth platform Monday.
The BEA stresses that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision. The finalized report will be released September 27.
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