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For the second half of 2018, the US economy is set to grow by 3.8 percent. Consumer confidence and tight labor markets are driving spending, while corporate tax cuts and strong business confidence are supporting business investment growth. Profits have reached record high levels on both a before- and an after-tax basis. In 2019, though, the Federal Reserve is likely to continue raising interest rates, boosting rates for both businesses and homeowners. Accelerating wage growth could also reduce profit margins. The new USMCA agreement, successor to NAFTA, keeps most provisions outside the auto sector in place, which is a relief to business. However, continued trade conflict with China could slow growth. These factors will combine to reduce GDP growth to 2.2 percent by the end of 2019.