John Ydstie

Americans have been waiting for a solid pay raise for years. Maybe there's good news awaiting them as the country employs more people.

The U.S. economic recovery has gone on for eight long years, and the unemployment rate is at a low 4.4 percent. But wage gains have barely budged.

That's got economists scratching their heads.

The U.S. economy gained momentum in the second quarter as consumers and businesses picked up their spending. Gross domestic product grew at an annual rate of 2.6 percent, an improvement over the first quarter but still not approaching the dynamic economy President Trump promised during the campaign.

The U.S. economy grew at an annual rate of 2.6 percent between April and June.

It was nice comeback from the tepid 1.2 percent annual growth rate of the first quarter and more in line with the turbo-charged growth of 3 percent that has been promised by the Trump administration.

The latest growth was partially driven by an increase in consumer spending. It's a positive sign that Americans are opening up their wallets, especially since consumer spending makes up about 70 percent of the economy.

The Trump administration's promise to turbocharge economic growth has yet to be fulfilled, even though forecasters are predicting that the economy has rebounded from a weak 1.4 percent annual growth rate in the first three months to a rate closer to 2.8 percent. That is the number many economists are expecting to see when the government issues its report on second-quarter growth on Friday.

After a two-day meeting in Washington, D.C., Federal Reserve policymakers say they'll keep their benchmark rate in a range between 1 percent and 1.25 percent for the time being.

Fed officials said "job gains have been solid" and the U.S. "labor market continues to strengthen" in the statement after a meeting of the Federal Open Market Committee.

The officials described economic activity as "rising moderately." They noted that unemployment rate has declined since the beginning of the year. The Fed is close to meeting its mandate to maximize employment.

If you've checked your retirement account lately or read the business headlines you probably know the stock market is riding high. The major U.S. stock indexes are in record territory. So what's lifting the market? Despite all the turmoil in Washington, is it still the Trump rally?

Since the U.S. election, the S&P 500 is up 16 percent and the Dow is up 18 percent, even though President Trump has yet to deliver on most of his pro-growth policies, including tax cuts and a big infrastructure plan.

A key part of President Trump's tax plan is to repatriate corporate profits held overseas back to the U.S. With the lure of lower corporate rates, the idea is that companies will free up overseas earnings and instead invest in jobs and equipment in the U.S. A similar scheme was tried during the administration of George W. Bush, but companies used most of the money on stock buybacks or to pay dividends to shareholders.

President Trump has proposed big tax cuts for businesses and individuals — breaks that could reduce federal revenue by trillions of dollars. Economists and tax specialists say that unless they're paid for, the tax cuts could explode budget deficits and the national debt.

The prospect has prominent Republicans and Republican members of Congress worried.

Federal Reserve officials left interest rates unchanged as they ended their policy-making meeting in Washington, D.C., today.

The Fed raised its benchmark rate by a quarter of a percentage point back in March, to a range of 0.75 percent to 1 percent, where it remains. In their post-meeting statement today, the central bank policymakers provided little guidance on when their next rate hike might come.

President Trump has said over and over that creating jobs is at the top of his agenda. It may seem unfair to judge his progress on this goal in his first 100 days, but Trump has opened the door to scrutiny by making his own assertions on job creation.

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