The U.S. economy grew at a 2.4% annual growth rate from April through June, picking up from the 2% growth rate in the January-March quarter, according to information released by the Commerce Department Thursday.
Last quarter’s expansion – the gross domestic product represents the economy’s total output of goods and services — was well above the 1.5% annual rate that economists had forecast, according to a report from the Associated Press.
The AP reported that business investment, which grew at a 5.7% annual pace – the fastest rate since late 2021 — drove last quarter’s growth.
Consumer spending slowed to a 1.6% annual rate from a robust 4.2% pace in the first quarter of the year. Investment in housing fell in the face of higher mortgage rates.
“This is a strong report, confirming that this economy continues to largely shrug off the Fed’s aggressive rate increases and tightening credit conditions,’’ Olu Sonola, head of U.S. economics at Fitch Ratings, told AP. “The bottom line is that the U.S. economy is still growing above trend, and the Fed will be wondering if they need to do more to slow this economy.” In its continuing fight against inflation, the Fed has raised its benchmark rate 11 times since March 2022, most recently on Wednesday.
