WASHINGTON (AP) – The U.S. economy revved up this spring after a weak start to the year, fueled by strong consumer spending. But the growth spurt still fell short of the optimistic goals President Donald Trump hopes to achieve through tax cuts and regulatory relief.
The Commerce Department says growth in the gross domestic product, the economy’s total output of goods and services, expanded at a 2.6 percent annual rate in the April-June quarter. That’s more than double the revised 1.2 percent pace in the first quarter.
The improvement was powered by a robust recovery in consumer spending after a slowdown during the winter.
Trump campaigned on a pledge to boost growth to rates of 4 percent or better. But so far, his economic program has not advanced in Congress.
Wages and benefits paid to U.S. civilian workers grew more slowly in the second quarter.
The Labor Department says total compensation was up 0.5 percent in the April-June period, compared to 0.8 percent growth in the first quarter.
Wages and salaries, which account for 70 percent of compensation costs, also rose 0.5 percent. Benefit costs, which cover pensions and health insurance, increased 0.6 percent.
The slight slowdown in the second quarter likely means the Federal Reserve won’t be worrying about wage growth rising too quickly. Indeed, the Fed has expressed concern recently that inflation has fallen farther from its 2 percent annual target.
Despite this quarter’s slower increase, the Employment Cost Index has shown steady improvement as the unemployment rate has fallen to 4.4 percent.