That was almost double the first quarter rate of 2.2 percent and the strongest pace in almost four years.
On the two previous times that growth exceeded 4%, the economy grew at half that rate for the remainder of the year and finished the year just above 2% annual growth. A measure of domestic demand surged at a 4.3 percent rate in the second quarter.
Still, Silvia says, "you can have a very strong second quarter", but growth will slow to about 2 percent to 2.5 percent as the export picture turn negative.
Recall that before the June jobs report, Trump essentially leaked what turned out to be a strong jobs number in a tweet. So, in the next few months, the second-quarter GDP figures could turn out to be much different than they look now.
The United States slapped 25 per cent duties on US$34 billion worth of Chinese goods effective July 6, provoking a similar response from Beijing, which targeted soybeans and other agricultural products as well as US-made cars. There was also a front-loading of exports of other goods in the second quarter.
"The bottom line takeaway is that this growth is not sustainable and it will slow in the second half of the year", said Lakshman Achuthan, co-founder of the Economic Cycle Research Institute.
"We believe quarter two will represent a growth peak as the boost from tax cuts fades, global growth moderates, inflation rises, the Fed tightens monetary policy and trade protectionism looms over the economy", said Gregory Daco, chief USA economist at Oxford Economics.
More generally, economists question whether the animal spirits awakened by the US fiscal stimulus can continue to boost growth.
Net exports unexpectedly added 1.06 percentage point to the second quarter economic growth as USA businesses largely increased exports of foods, feeds and beverages ahead of retaliatory tariffs on US products, analysts said. "Now you have to redo your forecast and figure out what to do with the rest of the year", said Ward McCarthy, chief financial economist at Jefferies. While Obama never achieved the 3 percent annual growth that Trump hopes to see, he came close. Consumer spending, which accounts for 70 per cent of economic activity, rose to a 4 per cent annual growth rate after turning in a lacklustre 0.5 per cent gain in the first quarter.
"Real consumer spending rebounded, as expected, at a 4.0 percent pace, with gains in durable and nondurable goods as well as services". In addition to soybeans, exports were boosted by petroleum and related products.
Trade is forecast to have contributed at least 1.5 percentage point GDP growth in the second quarter after being neutral in the January-March period.
Consumer spending grew 4 percent, more than expected, while nonresidential business investment climbed at a pace of 7.3 percent. Both rates and stocks have cooled recently, but stocks have leveled off at a range that anticipates an economy that will grow significantly faster than it has. The trade wars are casting a pall on the business spending outlook. Because of the North American Free Trade Agreement, Canada's market is nearly totally open to the United States.