Trump aims to double US growth rate

This article is more than 12 months old

May 29, 2017 06:00 am

WASHINGTON President Donald Trump's economic and tax agenda assume growth in the world's largest economy will see a sustained rebound to double the current rate.

But analysts are casting doubt on that goal given the current tepid pace of the American economic expansion, as well as limitations on the potential to fuel growth - especially without also igniting inflation.

While the Commerce Department on Friday revised the estimate of first quarter growth up by a hearty half-point to 1.2 per cent, that is still well below the 2.1 per cent in the final quarter of last year.

First quarters are generally slower than the rest of the year, and consumption in the period while doubling to 0.6 per cent growth, was still at its lowest point since the end of 2009.

Business investments were stronger, thanks to a stunning 28.4 per cent spike in spending on structures, like oil wells and mines, a sector the Trump administration hopes to boost.

Economists do expect growth to pick up in the second quarter, with the Atlanta Federal Reserve Bank's "nowcast" on Friday predicting expansion at an annual rate of 3.7 per cent.