The US economy grew at an annual rate of 4.1% in the second quarter of this year, its fastest rate of expansion since 2014.
The acceleration in growth follows US GDP expanding at an annual rate of 2.2% in the first quarter - and after tax cuts agreed last year.
The US Bureau of Economic Analysis said the second-quarter surge was fuelled by increases in consumer spending, business investment and government expenditures.
Meanwhile, President Trump proclaimed a “new phase” in trade relations between the US and EU following a meeting with European Commission president Jean-Claude Juncker. A joint statement after the meeting said the US and EU would “work together towards zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods".
In the UK, the CBI business organisation said the recent heatwave had boosted retail sales, but warned that sales growth could be cooling off.
In the CBI’s monthly distributive trades survey, 32% of retailers said sales volumes were up in July compared with a year ago, while 12% said volumes were down - giving a balance of 20%.
Most retail subsectors saw higher volumes. Footwear & leather, recreational goods and department stores performed well, though clothing and furniture & carpets saw sales fall.
However, July’s 20% balance was down from 32% in June. And while 14% of survey respondents expect sales volumes to increase next month, 14% expect a decrease, giving a balance of 0%.
Alpesh Paleja, CBI principal economist, said: “While the heatwave has boosted retail sales in recent months, we may be seeing some early signs of a cooling off, with retailers expecting no growth in sales next month.”
He added: “The long-term challenges facing the retail sector are significant. Continually subdued real wage growth means that households are still feeling the pinch, and retailers are still grappling with deeper structural issues, such as digital disruption.”
UK manufacturing growth accelerated to its strongest pace in a year, according to a separate CBI survey.
In the CBI’s quarterly industrial trends survey, 41% of firms said output volume was up over the past three months, while 14% said output was down, a balance of 27% - up from 13% the previous quarter.
However, investment intentions deteriorated significantly in the three months to July, and growth in output and total orders are expected to slow moderately in the three months to October.
Rain Newton-Smith, CBI chief economist, said: “The pick-up in output growth is good news and with new orders still running at a healthy rate, the near-term outlook for manufacturers remains reasonably bright.”
“Yet manufacturers are still in wait-and-see mode when it comes to their investment plans. Skills shortages are increasing and making it hard for businesses to invest in capital projects, particularly with ongoing uncertainty around the direction of Brexit talks.”
Main source of information: Company Report and Accounts, Bloomberg
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