WASHINGTON _ Boosted by tax cuts, the U.S. economy surged this spring to grow at a robust 4.1 percent annual pace for its best quarterly performance since 2014, the Commerce Department reported Friday.
But with trade tensions still strong between the United States and some key trading partners, particularly China, analysts expect the April-through-June growth will be the high-water mark for the economy this year.
That would mean the tax cuts would fall short of the economic "rocket fuel" predicted by President Donald Trump and Republicans when they pushed through the legislation last year.
Though it was below analysts' expectations of 4.4 percent, the latest report on total economic output, also known as gross domestic product, was undeniably strong. The last time the U.S. economy topped 4 percent growth in a quarter was in 2014, when the figure was 4.9 percent.
But much of the second-quarter gains were make-up for a mediocre first quarter. The economy grew at just a 2.2 percent annual rate in January through March, a figure that was revised upward by 0.2 percentage points by the Commerce Department on Friday.
The first-quarter performance, down from the end of last year, was surprising given that the $1.5 trillion in tax cuts, focused mostly on businesses and the wealthy, took effect Jan. 1.
Consumer spending in the second quarter soared to a 4 percent annual rate, the best since 2014, after growing at only a 0.5 percent rate in the first quarter.
Exports also surged in the second quarter, growing at a 9.3 percent annual rate, up from 3.6 percent in the first quarter, as U.S. businesses rushed to deliver their goods and services before other retaliatory tariffs from other nations kick in.
A key measure of business investment slowed in the second quarter, to a still-strong 7.3 percent from 11.5 percent in the previous quarter.
Trump and Republicans criticized former President Barack Obama for not having a single calendar year in which economic growth hit 3 percent. For the first half of 2018, the U.S. economy grew at a rate of about 3.2 percent.
But economists said tensions between the U.S. and China, as well as several other nations, will weigh on the economy the rest of this year. A poll of 55 economists released this week by Reuters found that they believe economic growth will be slower in the second half of this year.
Trump has boasted about a big pickup in economic growth since he took office. "We're now in the midst of a great economic revival," he said in a speech in Kansas City, Mo., on Tuesday.
As Congress finished work on the tax-cut legislation in December, Trump said U.S. economic growth "could go to 4, 5 or even 6 percent, ultimately."
Since then, his advisors have lowered those estimates.
Last week, Larry Kudlow, director of the White House's National Economic Council, predicted that the annual growth rate might hit 4 percent "for a quarter or two."
The annual Economic Report of the President, released in February, forecast 3.1 percent growth this year, increasing to 3.2 percent next year. Growth would be at least 3 percent a year through 2024. But those forecasts are higher than others. The Congressional Budget Office recently estimated 3.3 percent growth this year, dropping to 2.4 percent in 2019 and 1.8 percent the following year.
Federal Reserve policymakers said in June that they expected 2.8 percent growth this year, declining to 2.4 percent in 2019 and 2 percent the year after that.
