The US economy grew at a 3% annual pace in the last quarter due to strong consumer spending and business investment.
The rate is an increase from the initial estimate of 2.8% by the Commerce Department and marks a sharp acceleration from the first three months of 2024.
Driving the news: Consumer spending accounts for about 70% of US economic activity, rose 2.9% annually in Q2, up from 2.3% in the initial estimate.
- Business investment grew at a 7.5% rate, led by a 10.8% jump in investment in equipment.
- The economy remains resilient despite the pressure of continued high-interest rates, causing an increase in consumer confidence.
Go deeper: Inflation eased, with the PCE inflation gauge rising at a 2.5% annual rate last quarter, down from 3.4% in the first quarter and a slight improvement on the government’s first estimate.
- With inflation hovering slightly above the benchmark rate of 2%, Jerome Powell, the chairperson of the Federal Reserve, is expected to cut the benchmark interest rate to maintain a healthy job market and avoid triggering a recession.
- The GDP category representing the economy’s underlying strength rose at a healthy 2.9% annual rate, up from 2.6% in the first quarter, which includes consumer spending and private investment.
