WASHINGTON: US officials on Thursday confirmed the economy’s steady-but-slower growth in the second quarter while new data showed a worsening plunge in investment by companies, notably hitting the manufacturing sector.

The world’s largest economy expanded at a two per cent clip in the April-June period, down markedly from 3.1 per cent growth at the start of the year, the Commerce Department said, matching an estimate released last month.

Corporate profits were also revised downward while inflation was hotter than previously reported.

Forecasts suggest the economy should expand at a similar pace in the third quarter, putting the United States on track to fall short of President Donald Trump’s 3pc GDP target for a second straight year.

And, as recession fears mount ahead of 2020’s elections, President Donald Trump’s escalating trade war with China and a slowing global economy have made US companies fearful of investing, weighing on growth.

The picture might have looked even worse were it not for bumped-up estimates of construction spending by state and local governments and a dip in imports, which offset losses elsewhere.

Amid rising wages and low unemployment, American consumers spent the most in the second quarter in almost five years.

Spending was weaker than previously thought, however, as consumers shelled out less for food and personal care.

Consumer spending, a mainstay of the US economy, has become its lone bright spot, with exports, agriculture and manufacturing and business investment all weighed down by falling global demand and the trade war.

Published in Dawn, September 27th, 2019