The U.S. GDP grew 2.8% annually in the second quarter.
The Department of Commerce will release the PCE inflation index on Friday, which is closely monitored by the Fed.
The data could concern investors, who are anticipating a certain weakening of the U.S. economy that would support an interest rate cut by the Federal Reserve starting in September.
The U.S. GDP grew more than expected in the second quarter of 2024, increasing by 2.8% on an annualized basis, compared to 1.4% in the first quarter, according to the initial estimate from the Department of Commerce, released on Thursday morning.
Analysts had anticipated stronger growth in the second quarter of the year, although at a lower rate (1.9%) for the April-June period, according to the consensus published by Briefing.com. The U.S. measures economic growth on a quarterly basis with a 12-month projection based on current conditions at the time of measurement.
On a quarterly basis, growth is 0.7%, compared to 0.4% between the first quarter of this year and the last quarter of the previous year.
The Department of Commerce attributes this growth to an “increase in consumer spending, both on goods and services,” as well as “growth in private inventory investment” by businesses.
These figures are positive news for President Joe Biden and Vice President Kamala Harris, who will be the Democratic Party’s nominee for the presidential election on November 5 and will seek to defend the administration’s economic achievements as part of her campaign.
The data could worry investors who expect some weakening of the U.S. economy that would justify an interest rate cut by the Federal Reserve starting in September.
The Department of Commerce will release the PCE inflation index on Friday, which is closely monitored by the Fed to determine its monetary policy.
Inflation moderated in 2023 but remained above the 2% annual target set by the Fed, which has not yet eased its monetary policy as the markets had hoped.
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