Economic activity in the United States expanded at a 4.1% rate in the second quarter, more than roughly doubling Q1’s pace, according to today’s preliminary report from the Bureau of Economic Analysis. The acceleration marks the strongest gain for real gross domestic product (GDP) since 2014.

Today’s update also shows that the annual pace of GDP continued to strengthen in year-over-year terms, for both real (inflation-adjusted) and nominal measures of economic output. On both counts, the Q2 numbers reflect the eighth consecutive quarterly improvement in growth – a sign that the latest re-acceleration in the economy that began in Q3 2016 continued to strengthen through 2018’s midpoint.

“The economy is doing quite well,” says Michael Feroli, chief US economist at JPMorgan Chase. He cautions, however, that “it’ll be hard to repeat this performance on a sustained basis,” citing the diminishing boost from tax cuts and a headwind from a stronger dollar as factors in the months ahead.

The senior US economist at Societe Generale agrees. “I wouldn’t want to overstate the underlying strength in GDP growth based on Friday’s numbers,” says Omair Sharif. “There was a big boost from trade, but that’ll go away” and “it’s highly unlikely we’ll get 4 percent growth, or even 3 percent on a sustained basis.”

A weaker housing market may also be a factor that weighs on economic activity in this year’s second half, as outlined earlier today.

Today’s results, however, certainly paint a bright profile for the macro trend through this year’s first half. Notably, consumer spending perked up quite a bit, rising at an annualized 4.1% rate in Q2 – the fastest since 2014 – and nearly double the gain in the previous quarter.

GDP data will be revised in the months ahead, but it’s likely that the final figures will reflect solid growth for Q2. More generally, today’s preliminary report confirms what’s been clear all along – recession risk for the US has remained virtually nil (see this week’s business-cycle update, for instance).

Now the focus turns to Q3. With a healthy tailwind coloring expecations, the next round of numbers will be closely read for clues about how the year’s second half will compare, starting with next week’s main event for economic releases: payrolls for July (scheduled for Friday, August 3).

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