The U.S. economy grew at a 2.0% annualized rate in the second quarter of 2019, the Bureau of Economic Analysis reported Thursday in a second estimate of gross domestic product.
Thursday’s report revised the preliminary estimate of 2.1% growth released last month down by 0.1 percentage points. Forecasters expected GDP growth to be revised down to 2.0%.
The Trump administration has set a target for annual economic growth of 3%, and in the first quarter of 2019, real GDP increased 3.1%.
The deceleration of economic growth in the second quarter comes amid growing fears about the possibility of an economic downturn, which could be a significant obstacle for President Trump as he seeks reelection. The bond market this month flashed a warning sign about a potential recession, prompting the Dow Jones Industrial Average to crater 800 points.
Trump frequently touts the strength of the economy as a key achievement of his administration and has largely shunned suggestions that a recession may be looming. Still, the president has sought to pin the blame on the Federal Reserve and its chairman Jerome Powell, who Trump tapped to succeed Janet Yellen last year.
Trump has accused the Fed of stymying economic growth by raising interest rates four times in 2018. The central bank, however, cut rates in July for the first time since the 2008 financial crisis.
The Fed’s policy-making committee will meet again next month, and during a highly-anticipated speech in Jackson Hole, Wyoming, last week, Powell offered no indication of whether the central bank would cut rates again. He did, however, say the central bank would “act as appropriate to sustain the expansion.”
Further weighing on economic expansion could be the president’s ongoing trade war with China. The Trump administration is set to slap $300 billion in goods from China with 15% tariffs beginning Sept. 1, with a second wave taking effect Dec. 15.
Duties have already been imposed on $250 billion worth of products shipped from China, but last week, the president announced those levies would be hiked from 25% to 30% starting Oct. 1.
Trump’s decision to increase the taxes on Chinese products came after Beijing announced it would be hitting $75 billion in U.S. goods with retaliatory levies.
