Aug. 30, 2018 -- WASHINGTON (Reuters) -- U.S. consumer spending increased solidly in July, suggesting strong economic growth early in the third quarter, while a measure of underlying inflation hit the Federal Reserve’s 2 percent target for the third time this year.
Other data on Thursday showed an increase in new applications for unemployment benefits last week, but the underlying trend continued to point to a robust labor market.
There are, however, concerns the Trump administration’s protectionist trade policy, which has led to an escalating trade war with China and tit-for-tat import tariffs with other trading partners, including the European Union, Canada and Mexico, could hurt the economy.
“The trade war thunder on the horizon hasn’t moved closer to shore,” said Chris Rupkey, chief economist at MUFG in New York. “Consumers are doing their part to keep the economy’s engines running strong in the second half of the year.”