The US economy expanded at a 2.1 per cent annual pace in the April-June quarter, compared to the initial estimate of 2.4 per cent, according to official revised estimates released on Wednesday, August 30. The US government had previously estimated that the economy expanded at a 2.4 per cent annual rate last quarter.
The US Commerce Department’s second estimate of growth last quarter marked a slight acceleration from a 2 per cent annual growth rate from January through March. US government’s data of the GDP — the total output of goods and services — showed that growth last quarter was driven by upticks in consumer spending and business investment.
The world’s largest economy has proved durable in the midst of the US Federal Reserve’s aggressive interest rate hike cycle to contain soaring inflation, which hit a four-decade high last year.
Economists had forecast that the gross domestic product, or GDP, assessment would remain unchanged from the initial estimate, though it still marks a slight increase from growth of 2 per cent during the first quarter.
Though the US economy has been slowed by the Fed rate hike, it has managed to keep expanding through the subsequent quarters. Since March of last year, the Fed has raised its benchmark rate 11 times, making borrowing for everything from cars to homes to business expansions much more expensive and prompting widespread predictions of a coming recession.
Since peaking at 9.1 per cent in June 2022, year-over-year inflation has fallen more or less steadily. Last month, it came in at 3.2 per cent — a significant improvement though still above the Fed’s 2 per cent inflation target.
Stocks rose in morning trading on August 30 following several updates showing that the job market continued cooling, but economic growth remained resilient. The S&P 500 rose 0.5 per cent and continued to chip away at the market’s losses in August. The benchmark index is coming off of three straight gains. The Dow Jones Industrial Average rose 131 points, or 0.4 per cent, to 34,984 and the Nasdaq composite rose 0.7 per cent.
Source : Mint
