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US reports better than forecast Q2 growth, dollar strengthens

US reports better than forecast Q2 growth, dollar strengthens

The U.S. economy reported a better-than-forecast growth in the second quarter, the advanced GDP reading released on Friday showed.

The world’s biggest economy expanded an annualized 2.1 percent in the April-June quarter, the second slowest since the end of final quarter of 2016, following a revised growth of 3.1 percent in the first quarter of 2019. Analysts had predicted a growth pace of 1.8 percent.     

“The deceleration in real GDP in the second quarter reflected downturns in inventory investment, exports, and nonresidential fixed investment. These downturns were partly offset by accelerations in PCE and federal government spending,” said the U.S. Bureau of Economic Analysis.

The U.S. growth figures could prompt policymakers to rethink about cutting interest rates before next week’s Fed rate decision, which is widely predicted to witness a rate reduction by 25 basis points.

The Fed had signaled the economy’s slowdown was driven by the U.S.-China trade war. 

The dollar index traded continued to trade higher at 97.67, after hitting a new session top at 97.70, the highest level since early June. Now, the dollar is set for its second straight weekly gain. 

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