US Economy Grows at 3% in Q2, Upgraded from Initial Estimate
WASHINGTON – The U.S. economy grew at an annualizedrate of 3% in the second quarter of 2024, according to revised data released by the U.S. Department of Commerce on August29th. This marks an upward revision of 0.2 percentage points from the initial estimate.
The revised data shows a stronger-than-expected performance for the U.S. economy, exceeding the 1.4% growth rate recorded in the first quarter. Key drivers of this growth included personal consumption expenditures (PCE), which account for roughly 70% of theU.S. economy, and non-residential fixed investment, a measure of business investment.
PCE rose by 2.9% in the second quarter, up 0.6 percentage points from the initial estimate. This suggeststhat consumer spending remained robust despite rising interest rates and inflation. Non-residential fixed investment grew by 4.6%, with equipment investment surging by 10.8%. This indicates that businesses are continuing to invest in their operations despite economic uncertainties.
However, residential fixed investment declined by 2%, a reversal fromthe significant 16% growth recorded in the first quarter. This suggests a slowdown in the housing market, potentially driven by higher mortgage rates.
In terms of contribution to overall economic growth, PCE contributed 1.95 percentage points, government consumption and investment added 0.46 percentage points, privateinventory investment contributed 0.78 percentage points, and net exports subtracted 0.77 percentage points.
Analysts believe that the strong performance in PCE and business investment were the main factors driving the 3% growth rate in the second quarter. This growth rate suggests that the U.S. economy remainsresilient in the face of high interest rates and indicates a potential soft landing for the economy.
The 3% growth rate in the second quarter is a positive sign for the U.S. economy, said [Name of Economist], an economist at [Name of Institution]. It shows that the economyis still growing despite the challenges posed by high interest rates and inflation. This suggests that the Federal Reserve may have more room to maneuver in its efforts to control inflation.
The U.S. Department of Commerce typically releases three estimates of quarterly economic data as more information becomes available. The final revision for the second quarter GDPdata will be released on September 26th.
The revised data provides a more complete picture of the U.S. economy in the second quarter of 2024. While the growth rate is encouraging, it remains to be seen whether this momentum can be sustained in the face of ongoing economic challenges.The upcoming final revision of the GDP data will provide further insights into the health of the U.S. economy.
Views: 0