For a better sense of the underlying pace of growth, economists often look at an alternative measure that strips out trade, government spending and the volatile inventories component. That measure, known as “final sales to private domestic purchasers,” rose 4.3 percent in the second quarter, up from 2 percent in the first three months of the year.
Government spending isn’t the only policy elevating economic growth. Republican tax cuts are probably also playing a role, although the effects are hard to quantify. Consumer spending rebounded in the second quarter after slumping in the first; business investment was solid, though it slowed a bit from the first quarter.
Whether those policies are a good idea is another question. Many economists question the wisdom of passing what amounts to a deficit-funded stimulus package when unemployment is low and the economy is strong. Few outside the White House think a growth rate of 4 percent is sustainable in the long term.
One of the few weak spots in Friday’s report came in the housing sector, where residential investment — a measure that includes home construction — fell for the second time in a row and the fourth time in five quarters. Separate housing data earlier this week likewise showed a slowdown in the sector, which has often served as an economic bellwether.
The View From Washington
Even with all the caveats, Friday’s report is good news for Mr. Trump, and for Republican congressional candidates hoping that the strong economy will improve their chances in the midterm elections this fall. The government won’t release its initial estimate of third-quarter G.D.P. until Oct. 26, just over a week before Election Day, and after many voters will have made up their minds.
The new numbers are unlikely to surprise Federal Reserve policymakers, who are expected to leave interest rates unchanged at their meeting next week. The report showed that inflation slowed a bit in the second quarter but remains close to the Fed’s 2 percent target. Faster growth could make it more likely that the Fed will stick to its policy of gradual rate increases, despite recent hints from Mr. Trump that he would prefer to see rates stay low.
Reviewing the Revisions
In addition to the second-quarter data, Friday’s report included comprehensive revisions to economic data going back to the 1920s. Most of the changes were minor, consisting largely of offsetting shifts of activity from one quarter to another. The revisions made growth look slightly better under President Barack Obama and slightly worse in Mr. Trump’s first year; the first quarter of 2018, however, also looks a bit better after the revisions.