The U.S. economy grew faster than expected in the second quarter.
According to preliminary estimates of U.S. gross domestic product (GDP) for the second quarter released by the U.S. Bureau of Economic Analysis, the economy will grow at an annualized rate of 2.8% during the same period, which is higher than the 2% growth forecast by economists polled by Bloomberg. It was a big improvement. This figure exceeded the first quarter’s GDP (revised downward to 1.4%).
“We think (the second quarter) ends up being the best quarter for the economy this year,” Nationwide Financial Markets economist Oren Krachkin said of this morning’s second-quarter GDP report. “With consumers tightening their wallets and businesses becoming more reluctant to invest and hire, we should expect to see more sober GDP reports in the future.”
Meanwhile, the “core” personal consumption expenditure index, which excludes volatile food and energy categories, rose 2.9% in the second quarter, beating expectations of 2.7% but 3.7% in the previous quarter. This was well below the rise.
The release of this data will help investors wonder when the Federal Reserve will start cutting interest rates and whether the central bank can achieve a soft landing in which inflation falls to its 2% target without a significant economic downturn. It was carried out in the midst of efforts to determine the
Going into Thursday, markets were pricing in a 100% chance that the Fed would cut rates by the end of its September meeting.
“Today’s numbers will reinforce the idea that the Fed has the benefit of time,” Neil Dutta, head of Renaissance Macroeconomic Research, said in a note after Thursday’s announcement. “In the Fed’s mind, domestic private demand grew at a solid pace in the second quarter, so there’s no need to rush. July is still a preparatory meeting for September.”
Soccer – FIFA World Cup Qatar 2022 – Group B – Iran vs. USA – Al Thumama Stadium, Doha, Qatar – November 29, 2022 Fans raise the US flag in the stands before the match REUTERS/Fabrizio Bensch (Reuters/Reuters)
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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