there's reason to think the forces driving last quarter's expansion lack staying power. A good chunk of the headline growth in the second quarter was boosted by a confluence of one-off and short-term measures by the US president.

Take trade, for example. Net exports contributed a whopping 1 percentage point to real GDP growth last quarter--the most since 2013. But there's fair reason to suspect that this isn't due to an out-of-the-blue resurgence of US manufacturing, particularly given that the dollar was fairly strong versus other major currencies during the quarter. Much of this could instead be a knock-on effect of Trump's trade war, as importers snapped up US goods before looming tariffs drove up prices. For example, soybean exports have jumped as buyers tried to get out ahead of the retaliatory tariffs on the agriculture product by China.


overall investment fell versus Q1--meaning it dragged down last quarter's real GDP growth. Growth in equipment investment was feeble, suggesting that tax cuts haven't yet brought forth a US manufacturing revival. More ominously, residential investment--another big engine of US growth--fell by 1.1 percentage points, extending a slump in housing spending that began in Q2 2016.

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