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It turns out that all the hype about higher growth actually can come true. The U.S. Department of Commerce reported that gross domestic product (GDP) for the second quarter rose at a seasonally and inflation-adjusted rate of 4.1%. This was the largest gain in about four years, on the heels of strong consumer spending, exports and business investment.

The Wall Street Journal had estimated a 4.4% growth rate, and the final first-quarter number was pegged at 2.2% GDP growth. The personal savings rate fell to 6.8% in the second quarter from 7.2% in the first quarter.

Net exports added 1.06 percentage points as trade played a role in GDP during the second quarter. Business inventories subtracted one point from the second-quarter GDP report. Remember that both trade numbers and inventory numbers tend to be volatile.

Personal consumption expenditures rose by 4.0% in the second quarter, and it is important to note that consumer spending accounts for roughly two-thirds of each GDP report. Spending on durable goods added 0.64 points to the report.

Non-residential fixed investment rose at a strong 7.3% in the second quarter. While that figure looks high, it was up 11.5% in the first quarter. Final sales rose by 5.1% in the second quarter from a gain of 1.9% in the first quarter.

Housing continues to be a drag as residential fixed investment fell by 0.1% in the second quarter.

Government spending was up by 2.1% annualized in the second quarter.

Another driving force here was that exports and sales of soybeans were pushed forward in the second quarter ahead of the tariffs. This should be expected to act as a drag on GDP in the third quarter, if the preliminary reactions and indications hold true.

One more issue that should stand out is that the United States has now formally hit that $20 trillion mark in annualized GDP. The Commerce Department report said:

Current-dollar GDP increased 7.4 percent, or $361.5 billion, in the second quarter to a level of $20.4 trillion. In the first quarter, current-dollar GDP increased 4.3 percent, or $209.2 billion… The price index for gross domestic purchases increased 2.3 percent in the second quarter, compared with an increase of 2.5 percent in the first quarter. The PCE price index increased 1.8 percent, compared with an increase of 2.5 percent. Excluding food and energy prices, the PCE price index increased 2.0 percent, compared with an increase of 2.2 percent.

The market still seems to be more fixed on corporate earnings than it is on broader economic reports. We also have to keep reminding ourselves that the second-quarter GDP is backward-looking and brings little to no real outlook for the third and fourth quarters of 2018, while the United States is in the midst of trade-war and tariff spats with China and other nations.