With numbers that have left many economists surprised, the U.S. Bureau of Economic Analysis has just released a report showing that the national economy in the second quarter of this year grew by exactly 2.8%.
The steady rise in the country’s gross domestic product was significantly above consensus expectations of no more than 2.1%, with the report also noting that jobless claims between April and June had dropped by some 10,000.
The 2.8% showing was particularly impressive, according to experts, given that the rate of growth in the first quarter of this year was only 1.4%.
Moreover, looked at from the perspective of the last two years, the 2.8% performance was the strongest in that period of time, with the exception of the first two quarters of 2023, when those figures came in at 4.9% and 3.4% respectively.
The Bureau of Economic Analysis report notes that the improved GDP “reflected increases in both services and goods.”
“Within services,” continued the report, “the leading contributors were healthcare, housing and utilities, and recreation services. Within goods, the leading contributors were motor vehicles and parts, recreational goods and vehicles, furnishings and durable household equipment, and gasoline and other energy goods.”
Private inventory investment for the most part reflected increases in “wholesale trade and retail trade industries that were partly offset by a decrease in mining, utilities, and construction industries.”
The new numbers, said the Financial Times, is a “sign of continued consumer resilience as the Federal Reserve considers cutting interest rates in the coming months.”
Noting that the latest figures comprise a “sharp acceleration from the first quarter” of this year, the Wall Street Journal said the report shows a strong second quarter as “consumers increased their spending, businesses invested more in equipment and stocked inventories, and inflation cooled.”
Were President Biden running for re-election, the latest BEA report might be used by him as an argument for a second term. Even so, he quickly issued a statement from the White House declaring: “We’ve created nearly 16 million jobs, wages are up, and inflation is coming down.”
“We’re rebuilding the nation and bringing manufacturing back to America,” Biden added.
Although the latest BEA figures are generally regarded as strong, they are substantially below the 3.3% to 7% seen in the last two quarters of 2021, but nicely better than the minus 2% recorded during the first quarter of 2022.
By Garry Boulard
Image Credit: Courtesy of Pixabay
