US economy hits Trump's expansion target

Consumers' increased willingness to spend and higher business investment prompted a sharp upward revision in US gross domestic product (GDP). It surged by 3.0 percent in the April-June period, the Commerce Department said in its updated report Wednesday.

Analysts said the data showed an economy "on a sturdy footing, enough to keep unemployment at the current low trend."

The Trump administration had pledged to return the US economy to sustained annual growth of 3.0 percent or more by slashing taxes and regulations while boosting trade..

What will the Fed make of it?

Experts warned, however, that the drag on growth from Hurricane Harvey was likely to be substantial, given the extent of the damage wrought by rains and flooding.

In addition, Trump has alienated members of his own party who face battles in Congress next month over borrowing authority, the budget and reconstruction aid for areas battered by Hurricane Harvey.

Nonetheless, the faster expansion rate in the second quarter could relieve the pressure on the Federal Reserve, which has been divided over the course of monetary policy in recent months.

The central bank has raised interest rates twice this year, but some market players doubt the Fed will initiate a third hike by December in light of persistently weak inflation.

hg/jd (AFP, dpa)