U.S. Economy Accelerates in Second Quarter with Robust Consumer Spending
The U.S. economy gained momentum in the second quarter, driven by increased consumer spending, higher business investment in equipment, and cooled inflation.
GDP Growth Surpasses Expectations
Gross domestic product (GDP)—the value of all goods and services produced in the U.S., adjusted for inflation and seasonality—rose at an annual rate of 2.8% from April through June, according to the Commerce Department. This growth outpaced the 1.4% rate in the first quarter and exceeded economists’ forecast of 2.1%.
Consumer Spending Boosts Economic Activity
Household spending, a primary driver of the U.S. economy, increased at a 2.3% rate in the second quarter, up from 1.5% in the first. Spending on goods saw a notable rise, while services spending showed a slight moderation.
Federal Reserve’s Outlook Unchanged
The report is unlikely to alter the Federal Reserve’s plans for upcoming interest rate decisions. Officials have indicated they will likely hold rates steady at their meeting next week but could consider a rate cut in September if inflation continues to decrease.
Implications for Federal Reserve Decisions
Thursday’s GDP report is one of the final significant economic indicators the Fed will review before their next meeting. The data suggest the U.S. economy remains on solid ground, reinforcing expectations for future economic stability.