Trump hails US economy as GDP rises at fastest pace since 2014 - as it happened
All the day's economic and financial news, including growth figures from two of the world's largest economies
- Latest: US economy grew at annual pace of 4.1% in last quarter
- Analysts: Trump's tax cuts spurred growth
- Fastest growth in almost four years
Earlier:
3.07pm BST
And finally, here's a clip of president Trump's comments on the US economy:
Donald Trump: "We're going to go a lot higher than these numbers - and these are great numbers"
US President hails accelerating US economic growth https://t.co/CTPNOP8rxO pic.twitter.com/XsaL8mXZci
3.06pm BST
Snap verdict: president Trump is clearly taking today's growth figure as vindication of his economic policies.
That means we can expect more of the same from the White House on trade, tax and spending.
This is scary. Today's GDP print is emboldening the Trump administration.
So expect more protectionist policies, more debt-financed (leveraged) fiscal spending and more pressure on Fed to keep economy hot.
It can only end horribly wrong in the long-run. Crash & Burn
3.04pm BST
Larry Kudlow, the president's top economic advisor, now speaks -- and he backs up Trump's claim that the US economy will keep growing strongly.
Kudlow insists:
This is a boom that will be sustainable.
3.01pm BST
Turning away from the economy, president Trump says that the remains of 55 Americans killed in the Korean war are returning to the US.
He thanks Kim Jong-Un for sticking to his commitment.
Trump: "I want to thank Chairman Kim for keeping his word" on returning remains of Americans lost in the Korean War.
2.57pm BST
Onto trade...and president Trump criticises other countries for stealing US jobs and plundering its wealth.
Our tariffs are bringing tariffs back to the US, he continues, saying that the burly steel workers he met in Illinois yesterday were in tears (of joy, presumably).
2.53pm BST
Giving his own trumpet a hearty toot, president Trump now says that his administration have achieved an "economic turnaround of historic proportions".
We are the envy of the entire world, he adds, saying that other world leaders are regularly congratulating him on the state of the US economy.
"We are the economic envy of the entire world," says Pres Trump, flanked by @VP and other senior Administration officials including @SecretaryRoss and @stevenmnuchin1. "We are finally putting America first," says @POTUS. pic.twitter.com/YCIBFnc8Eu
2.51pm BST
Trump makes a bold promise: "We are now on track to hit an average GDP annual growth of over 3% and it could be substantially over 3."
(GDP growth has been 2.8% in past 12 months)https://t.co/Mf6YQFLm75 #economy
2.49pm BST
President Trump is speaking on the economy now at the White House.
He says today's numbers are "great", and that America is going to go a lot higher.
2.24pm BST
We have the official thumbs up from the White House:
GREAT GDP numbers just released. Will be having a news conference soon!
2.18pm BST
Even if this pacey growth doesn't last, it gives Donald Trump a boost going into the mid-term election this autumn.
However, the feelgood factor could face if trade wars hurt the US economy in the coming months.
The words 'Make America Great Again' can be heard echoing from across the Atlantic this afternoon as the US economy grew 4.1% in the second quarter of 2018, which is the most robust pace in nearly 4-years.
Strong export figures, aided by soybean exports in addition to consumer spending, helped the surge in the GDP print.
2.05pm BST
Our US business editor, Dominic Rushe, writes:
The growth will be a major boon for the Trump administration, which pushed through $1.5tn in tax cuts at the start of the year with a promise that they would be paid for by economic growth.
Ahead of the announcement on Thursday, Donald Trump teased that good news could be coming. Breaking with a tradition of presidents refraining from commenting on market sensitive government releases ahead of their release, the president told a rally in Illinois: "Somebody actually predicted today 5.3 [percent growth]. I don't think that's going to happen ... if it has a four in front of it, we're happy."
The economic boost was driven by rising consumer spending, exports and business investment over the quarter.
Related: US economy growing at annual rate of 4.1%, fastest pace in four years
2.02pm BST
Here's Rob Hodgson, Senior Wealth Manager at GWM Investment Management, on the US GDP figures:
"Donald Trump's Chief Economic Adviser told us it was going to be 'big' and it's fair to say that analysts were projecting some exciting figures.
A 4.1% growth rate in Q2 is the strongest since the third quarter of 2014. Projections were ranging between 3 and 5 percent and business confidence remains upbeat so we were expecting a strong quarter of growth.
2.00pm BST
As this chart shows, America has just posted its strongest quarter since Donald Trump became president.
However, growth was still stronger in the middle of 2014, during Barack Obama's second term.
1.52pm BST
Nancy Curtin, chief investment officer at Close Brothers Asset Management, says Donald Trump's tax reforms have spurred US growth in recent months:
"The US economy is showing the fastest growth since 2014. A strong labour market, benign inflation and strong corporate investment have contributed to this positive landscape for growth.
The economy was already on the up before Trump's tax cuts added further fiscal fuel. The tax cuts are now filtering through to the real economy as companies have been empowered to increase investment spend, the lion share of which is going into technology and automation.
1.50pm BST
Pablo Shah, economist at the CEBR think tank, says America's growth rate was impressive in the last quarter:
While much of the resurgence in US growth can be attributed to somewhat transitory factors, today's figures remain impressive.
A strong labour market coupled with accommodative fiscal and monetary policies are set to sustain solid growth throughout the remainder of the year.
The US economy is likely to come off the boil in the coming quarters, as the boost to growth delivered by the tax cuts begins to wear off, trade restrictions and an overall slowing of the global economy start to weigh on exports, and further interest rate hikes tighten financial conditions.
1.46pm BST
The dollar has dipped slightly, despite America's growth rate jumping.
That suggests investors don't think this growth rate is sustainable.
1.43pm BST
US consumers drove America's US economic growth in the last three months.
Consumer spending grew at an annual rate of 4% in the last quarter, up from just 0.5% in January-March.
US consumers save Trump: US economy expanded at 4.1% pace in 2Q, less than expected 4.2%. This quarter, consumption was basically growth: it added 4ppts to growth of 4.1%. Net exports contributed 1.06ppt to GDP, most since 4Q 2013. Change in business inventories subtracted 1 ppt. pic.twitter.com/q3GZKWm9uB
1.34pm BST
NEWSFLASH: America's economy grew at an annual rate of 4.1% in the last three months, as growth accelerated.
That's the fastest growth rate since 2014, and a very solid result (although not as high as some economists had hoped).
1.14pm BST
It's nearly time to discover how fast America's economy grew in the last quarter.
Forecast range from an annualised growth rate of 2.6% all the way up to 4.8%, which would be very pacy.
Today's expectations on GDP... Remember that this is a lagging indicator. pic.twitter.com/txoOAmeOCm
1.00pm BST
First Facebook's shares tumble after missing Wall Street forecasts, then Twitter follows suit.
So has the social media boom hit a roadblock, or are investors simply over-reacting? Arguably, Wall Street should welcome signs that these companies are getting serious about tackling abuse, fake accounts and disinformation, even if it hits the bottom line.
One, expectations for revenue growth are being fundamentally reset in the social media space. Two, today's reaction is maybe overdone as investors have been spooked by the horrid earnings call from Facebook. Everyone knew that Twitter was full of fake accounts - why their removal should be impacting the share price in the way is unclear - investors may be better advised to keep a check on earnings and revenue growth instead.
Both Facebook and Twitter have been affected badly by fake news, fake accounts and accusations of Russian meddling. But arguably Twitter looks in better shape as the efforts to monetise the platform are working, whilst we see fundamental concerns about Facebook's advertising model."
12.34pm BST
Twitter says it is determined to tackle 'problem behaviour', even if it does hurt user numers.
It tells shareholders:
"We are making active decisions to prioritize health initiatives over near-term product improvements that may drive more usage of Twitter as a daily utility."
12.15pm BST
Some snap reaction to Twitter's results:
Twitter shares are tanking. The company's efforts to stem spam, fake accounts, & GDPR are impacting monthly active users. pic.twitter.com/ao63rcOaos
First glance at $Twitter Q2 results:
Strong revenue growth, $711m for the quarter (up 24% YOY)
User growth still sluggish, now at 335m global users (up 11% YOY but flat in US)
Total ad revenue for Q2: $601m (up 23% YOY) pic.twitter.com/c8KHXQpV8v
Fake News was good for user growth and revenue at Twitter and Facebook - now results getting hit as they clamp down$TWTR$FB
12.05pm BST
NEWSFLASH: Twitter has just reported that its user numbers have fallen, as it got to grips with fake accounts.
The social media/micro-blogging site says monthly users fell by one million in the last three months, to 353 million. Wall Street had expected a rise of one million.
Twitter falls as much as 18% in pre-market trading after reporting decline in monthly active users https://t.co/vY6xkMJVhe pic.twitter.com/hbUX3iSMjW
11.52am BST
City traders, mortgage holders, savers and borrowers all need to be alert for a UK interest rate rise next week.
The Bank of England sets monetary policy next Thursday, and a rate rise is possible - but not certain. There are arguments to hike, but also to sit tight a bit longer.
For a nation that has endured the trials and tribulations of Love Island over the summer, the original unreliable boyfriend returns next week. Will the Bank of England governor Mark Carney deliver the 0.25% rate hike that the market expects?
11.25am BST
France's weak growth this year could mean Paris misses its deficit reduction targets, and push the national debt higher, says economist Emanuele Canegrati:
#France's GDP Slowdown is much more than a simple growth problem. Macron's government risks to miss EU budget balance target (below 3%) for 2018 and French debt may hit 100% sooner-than-expected. Still Bad news for the French president. @graemewearden
11.12am BST
Global stock markets remain upbeat, as traders count down to 1.30pm BST...when we learn how America's economy fared in the last quarter.
Ken Odeluga of City Index says Wednesday's peach deal between the US and EU on trade is helping, as are recent financial results.
In Europe the stream of earnings is picking up, with a set of pleasing if not spectacular reports on Friday.
The car sector remains in sharp focus as an epicentre of the trade conflict on this side of the Atlantic and after the apparent stay of execution due to EU-U.S. rapprochement. With Britain's FTSE, Germany's DAX, Italy's MIB all just slightly higher and Paris's CAC slightly soft, the atmosphere is constructive for further potential strength though lacks catalysts.
10.53am BST
In the currency markets, the pound has dropped back below $1.31 against the dollar.
Sterling weakened after Brussels' negotiator Michel Barnier gave Theresa May's 'Chequers Plan' a punch in the solar plexus.
Related: Michel Barnier kills off Theresa May's Brexit customs proposals
10.30am BST
France's economy has been a tale of two halves in the last year, as economist Shaun Richards points out.
We get an idea of how much the economy of France has slowed from GDP growth in the last 4 quarters which have gone 0.7%, 0.7% and then 0.2%, 0.2%. Quite a lurch downwards........
10.12am BST
Christopher Dembik of Saxo Bank fears the French economy is facing a negative shock:
#France's Q2 GDP is out at 0.2%! Now the strong credit pulse from 2014 has turned down (our proprietary credit impulse comes out at only 0.4% of GDP in Q2 2018), the direct consequence we can expect is a negative shock on confidence, domestic demand and, ultimately, growth pic.twitter.com/QyV2F2kR6Z
9.34am BST
Here's our energy correspondent, Adam Vaughan, explaining why BP will be pleased to have acquired BHP's Billiton's US shale assets...
The deal gives BP a much bigger footprint in oil-rich onshore basins and was described by its chief executive, Bob Dudley, as a "transformational acquisition"
BHP first acquired shale assets in 2011 for more than $20bn with the takeover of Petrohawk Energy and shale gas interests from Chesapeake Energy Corp, but suffered as gas prices collapsed, forcing it to book massive writedowns.
"It was the wrong environment to have bought the assets when they did but this is the right market to have sold them in," Craig Evans, the co-portfolio manager of the Tribeca Global Natural Resources Fund, said.
Related: BP to buy BHP's US shale oil and gas assets for $10.5bn
9.24am BST
This chart, from INSEE, shows how France's growth rate slowed in the last six months, after a solid 2017:
9.12am BST
The IT meltdown at Britain's TSB bank has hurt its parent company, Sabadell, rather badly.
8.52am BST
France's weak growth figures haven't alarmed investors.
European stocks have opened higher with the FTSE 100 gaining almost 0.3%. The French CAC is 0.2% higher too.
8.33am BST
Here's Claus Vistesen of Pantheon Macroeconomic on the French GDP figures:
It's official; the French economy slowed to a a near stand-still in H1 2018. Consumers' spending *fell* in Q2, in part due to warm weather and transport strikes, constraining utility and services spending.
"Consumers' spending stung by transport-sector strikes, and warm weather in April." @ClausVistesen on #France Advanced GDP, Q2 #PantheonMacro
8.09am BST
Bloomberg says those French growth figures are a disappointment:
The euro area's second largest economy had a rough start to the year, when it, along with much of Europe, saw output strangled by bad weather and snowstorms. While there's been a general loss of momentum across many economies this year, France's slowdown was exacerbated when rail workers staged industrial action to protest President Emmanuel Macron's reform plans.
The continued sluggishness in France is a handicap for the euro area amid a period of uncertainty marked by global trade tensions and the prospect of European Central Bank paring back its vast monetary stimulus.
8.05am BST
Important energy news: oil giant BP is buying US shale oil and gas assets from mining group BHP Billiton, in a $10.5bn deal.
"This is a transformational acquisition for our Lower 48 business, a major step in delivering our upstream strategy and a world-class addition to BP's distinctive portfolio.
7.38am BST
Economist Philippe Waechter of Ostrum Asset Management says France's GDP new figures are disappointing.
It may mean Emmanuel Macron's government will fail to hit its growth targets this year.
The Q2 growth number for the second quarter was disappointing in France. It was just 0,158% (non annualized) which is rounded at 0,2%. It's the same figure than in Q1 (0,153%).
Carryover growth is just 1.3% for 2018 at the end of the second quarter. The government growth target in the 2018 budget is 1.7%. This is attainable if growth is at 0.55% in Q3 and in Q4. We can't imagine the reason of this stronger momentum during the second half of 2018.
Households consumption is the weakness of the French growth since the beginning of the year. Change in the purchasing power was negative in Q1 for fiscal reason (higher taxes) and was probably negative also in Q2 due to a higher inflation rate.
7.25am BST
French factories had a lacklustre quarter, with goods production falling in the last three months.
INSEE says:
Production in goods and services barely accelerated in Q2 2018 (+0.2% after +0.1%). It fell back again in goods (a'0.3% after a'0.6%) while it continued to grow in services (+0.4% after +0.3%).
Output in manufactured goods fell back again (a'0.2% after a'1.0%). Production in refinery stepped back (a'9.9% after a'1.6%) due to technical maintenance; production in electricity and gas dropped too (a'1.7% after +1.9%). However, construction bounced back (+0.6% after a'0.3%).
7.16am BST
A wave of strikes by French railway workers and Air France employees hurt growth in the last quarter, it seems.
In services, the slow down was notably driven by the downturn in transport expenses (a'3.2% after +1.0%), mainly in rail transport as a result of strikes.
7.03am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
France's economy has failed to accelerate.
#France #GDP Growth Rate QoQ 1st Est at 0.2% https://t.co/YZQGQp1rmQ pic.twitter.com/Gnye3TdzoL
Household consumption expenditures faltered slightly (a'0.1% after +0.2%), whereas total gross fixed capital formation recovered sharply (GFCF: +0.7% after +0.1%). Overall, final domestic demand excluding inventory changes contributed as much to GDP growth as in Q1 (+0.2 points).
Imports bounced back this quarter (+1.7% after a'0.3%) as did exports to a lesser extent (+0.6% after a'0.4%). All in all, foreign trade balance contributed negatively to GDP growth, a'0.3 points, after a neutral contribution in Q1. Conversely, changes in inventories drove GDP on (+0.3 points after 0.0 points).
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More than $120bn was wiped off the value of Facebook shares on Thursday, a drop larger than the value of corporate giants such as General Electric or Goldman Sachs - or the entire Argentine stock market.
Read more: https://t.co/38QjGFkTZ7 pic.twitter.com/nN3ncwzywU