ALBAWABA - Based on initial figures released by the Commerce Department on Thursday, the U.S. economy grew significantly in the second quarter compared to estimates, driven by robust consumer and government spending alongside a sizable increase in inventories.
The world's largest economy expanded at an annual pace of 2.8 percent in the April to June period, a remarkable increase from a sluggish start of 1.4 percent in the opening three months of this year, according to the Commerce Department.
According to Yahoo News, the preliminary figure is far higher than the 1.9 percent growth rate analysts had predicted.
In spite of interest rates remaining at their highest points in over 20 years, consumer spending has outperformed experts' expectations, despite industries like manufacturing and housing suffering after the Federal Reserve aggressively raising rates in 2022 to counteract soaring inflation.
The Commerce Department early report on the second-quarter gross domestic product on Thursday showed that growth was helped by both building up inventory as well as increased government spending. The home market rebound, on the other hand, went backwards and slowed down the economy a little, as per Reuters, with more money lost in trade, slowing down GDP growth.
On the other hand, imports, an element that decreases GDP, increased by 6.9%, marking the largest quarterly increase since the first quarter of 2022. The growth in exports was just 2%.
As a result of the news, futures indices for the stock market went upward, CNBC reports, while rates on Treasury securities moved downward.
In a statement, President Joe Biden praised the robustness of the economy, saying that he had "more to do" during the final six months in which he would be serving in the White House before the November elections he recently dropped out of, with VP Kamala Harris as his replacement candidate for the Democratic party.
