Assignment:
The quarterly data in the last few years from Bureau of Economic Analysis (BEA) website shows that the country's GDP is fluctuating. The 2nd quarter of 2018 showed a 4.1% increase in GDP which is higher than the 2.3% and 2.2% increase in the 4th quarter of 2017 and the 1st quarter of 2018, respectively. Obviously, the US economy is currently under the expansion phase at the end of 2nd quarter of this year.
According to the BEA website, the 2nd quarter increase in real GDP of 2018 has reflected the positive contributions of personal consumption expenditure (PCE), exports, nonresidential fixed investment, federal government spending, and state and local government spending which offsets the negative contribution of private inventory investment and residential fixed investment. The acceleration in real GDP accordingly reflected that the PCE and exports tend to perform well in the recovery phase thus leads to the expansion phase of the U.S. economy.
Another contributing factor that boosted the country's economy in the 2nd quarter of 2018 is the tax cuts (Arnold C. & Schneider A., 2018). Tax cuts give millions of Americans the benefits of tax deduction and lessen their income that is subject to tax. Thus, it improved their spending and helped in making decision to suggest that the US economy is under the expansion phase.
References Arnold, C., & Schneider, A. (2018, July 27). U.S. Economy Surges To A 4.1 Percent Growth Pace In 2nd Quarter. Data NI Release. (n.d.).