The expansion, which this month became the longest on record, is cooling as the effects of the 2018 fiscal stimulus fade and global growth slows, with the International Monetary Fund again cutting its estimate earlier this week. A stronger dollar and new tariffs are also making it less desirable to do business with the U.S.

Other data have highlighted the cooler pace of growth, with manufacturing figures showing tepid conditions and bellwether Caterpillar Inc. reporting a lackluster second quarter. A U.S. measure of production has declined in consecutive quarters, the common definition of recession, while a gauge of global factory activity contracted in May and June.

Orders Gaining
A more upbeat report Thursday showed business-equipment orders jumped in June by the most since early 2018, signaling company investment may be regaining momentum that would help support the economy in coming months.

Consumer sentiment is near historical highs and robust spending is backstopping growth. Retail sales have advanced for four straight months, the longest streak since early 2018, indicating Americans are benefiting from a tight labor market and elevated wages. Coffee chain Starbucks Corp. on Thursday said U.S. comparable-store sales soared 7% from a year earlier.

Trump targets growth of about 3%, though economists see the pace of growth remaining under 2% through at least the end of next year. Revised GDP figures released Friday show 2.5% growth on a fourth-quarter-to-fourth-quarter basis last year. That compares with a previous estimate of 3% and an upwardly revised 2.8% in 2017, the first year of Trump’s presidency.

Government spending got a boost from a 15.9% surge in federal nondefense expenditures, which contributed the most in two decades to growth. That was boosted by delayed compensation for some federal employees after the government shutdown that ended in January.

--With assistance from Kristy Scheuble and Sophie Caronello.

This article was provided by Bloomberg News.

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