Page 45 - 072917

Groton Daily Independent
Saturday, July 29, 2017 ~ Vol. 25 - No. 029 ~ 45 of 67
to lift the average growth in this recovery, now the third longest in U.S. history, to annual gains of 2.2 percent, up from the previous estimate of 2.1 percent.
The 2.6 percent growth in the second quarter was the fastest pace since the economy expanded at a 2.8 percent rate in the third quarter of last year.
Much of the strength in the April-June period came from consumer spending, which grew at a 2.8 percent rate, up from a 1.9 percent growth rate in the rst quarter. Consumer spending accounts for 70 percent of economic activity. The economy also bene ted far more modest inventory reductions, which was a big drag on rst quarter growth.
In the other major categories, business investment in plant and equipment grew at a 5.2 percent rate. But housing construction tumbled at a 6.8 percent rate, a payback after an 11.1 percent surge in the winter due to warmer-than-normal weather. Economists believe housing will resume growing in coming quarters.
A shrinking trade de cit added a modest 0.2 percentage point to growth as exports rose while imports, which subtract from the GDP, grew at a slower pace.
The government sector grew at a 0.7 percent rate, driven entirely by a big jump in defense spending. Domestic federal programs and state and local governments all showed small declines.
Weakness in the rst quarter that is followed by a stronger spring expansion has become a familiar pattern in recent years, prompting the government to launch a concerted effort to deal with aws in the government’s seasonal adjustment process.
Even with the spring rebound, analysts believe the economy will be unable to meet the ambitious targets set by Trump. For this year, many analysts believe growth will come in around 2.2 percent, essentially where growth has been since the recovery began in mid-2009.
During last year’s presidential campaign, Trump attacked the Obama administration’s economic record and said he could jump-start growth through a program of tax cuts for individuals and businesses, regu- latory relief, tougher enforcement of trade laws to lower U.S. trade de cits and an increase in spending on infrastructure projects.
But given the fact that the program has failed to advance in Congress, many economists have trimmed their expectations for growth this year, saying any boost from Trump’s efforts will not likely show up until 2018.
The GDP report released Friday was the rst of three estimates the government will issue. ___
Associated Press White House reporter Darlene Superville contributed to this report.
Higher prices, fewer options lurk after health bill collapse By TOM MURPHY, AP Health Writer
The health care law of the land has survived for now, but it needs help — and it needs it soon.
Soaring prices and fewer choices may greet customers when they return to the Affordable Care Act’s insurance marketplaces this fall, in part because insurers are facing deep uncertainty about whether the Trump administration will continue to make key subsidy payments and enforce other parts of the existing law that help control prices.
Assurances don’t look to be coming anytime soon. “As I said from the beginning, let ObamaCare implode, then deal. Watch!” President Donald Trump tweeted early Friday, soon after the Senate narrowly rejected the latest push to dismantle the Obama-era health care law.
Health and Human Services Secretary Tom Price said in a statement after the Senate vote that the Trump administration would pursue its health care goals through regulation.
That kind of uncertainty rattles insurers, many of whom have already stopped selling policies through public insurance markets established by the health law because they were losing money.
Their main concern now is that the Trump administration will stop paying crucial subsides called for in the law that help reduce costs like deductibles for people with low incomes. The subsidies, estimated at $7 billion a year, have been challenged by Republicans in court, and Trump has only guaranteed them