The U.S. economy grew at a faster pace than expected in the second quarter.
The Bureau of Economic Analysis’s preliminary second-quarter gross domestic product (GDP) estimate showed the economy grew at an annualized 2.8% over the period, well above the 2% forecast by economists surveyed by Bloomberg. The figure surpassed a downwardly revised 1.4% growth rate in the first quarter.
“We think [the second quarter] “The second quarter will be the best quarter for the economy this year,” Nationwide financial markets economist Oren Krachikin said of the second-quarter GDP report this morning. “We expect the GDP report to cool going forward as consumers tighten their purse strings and businesses become less willing to invest and hire.”
Meanwhile, the “core” personal consumption expenditures index, which excludes volatile food and energy items, rose 2.9% in the second quarter, beating the 2.7% forecast but down sharply from the 3.7% increase in the previous quarter.
The release of the data comes as investors try to gauge when the Federal Reserve will start cutting interest rates and whether it can achieve a soft landing that would see inflation fall to its 2% target without a major economic downturn.
As of Thursday, markets were pricing in a 100% chance that the Fed would cut interest rates by the end of its September meeting.
“Today’s data should support the notion that the Fed has the benefit of time,” Neil Datta, head of economic research at Renaissance Macro, wrote in a note after Thursday’s release. “The Fed sees no need to rush as private domestic demand grew at a solid pace in the second quarter, and July remains a preparatory meeting for September.”
SOCCER – FIFA World Cup Qatar 2022 – Group B – Iran v USA – Al Thumama Stadium, Doha, Qatar – November 29, 2022 A fan holds up an American flag in the stands before the match REUTERS/Fabrizio Bensch (REUTERS / Reuters)
Josh Shaffer is a reporter for Yahoo Finance. Follow him on X Follow.
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