Economic Growth In US Is Looking Good

Gross domestic product expanded at an annual rate of 2.3 percent in the April-June period, the Commerce Department reported, slightly below the 2.5 percent consensus estimate.

The median estimate of economists is for growth of 2.5%, Capital Economics says.

Reflecting revisions to previous data, the report said GDP growth in 2013 was downwardly revised to 1.5 percent from 2.2 percent.

The Bureau emphasizes that the second-quarter advance estimate released Thursday is based on source data that are incomplete or subject to further revision by the source agency.

In this photo taken on Thursday, February 12, 2015, a man welds parts in fans for industrial ventilation systems at the Robinson Fans Inc. plant in Harmony, Pa. The Commerce Department releases second-quarter gross domestic product on Thursday, July 30, 2015. This could point to a slight growth in interest rates this year.

Economists predicted that real GDP would rise by 2.7 percent, according to the Wall Street Journal.

The personal consumption expenditures price index rebounded at a 2.2 percent rate, the fastest since the first quarter of 2012, after falling at a 1.9 percent rate at the start of the year.

The first quarter is still the lousiest time of year for the U.S. economy, though it now looks a tad less grim, updated figures show.

Overall consumer spending has been choppy, suggesting some Americans remain cautious about opening their wallets despite strong job gains this spring and accelerating wages. In recent years, in particular, the government appears to have underestimated growth in the January-March quarter.

That’s partly attributable to smoothing swings in federal defense spending around the end of the fiscal year, Nicole Mayerhauser, chief of BEA’s National Income and Wealth Division, said in a briefing with reporters.

The second quarter has brought an increase in U.S economic growth as consumer spending and housing equalize the trade and energy sector.

Investment gained just 0.8% following 3.3% in Q1 as non-residential investment was weak at minus 0.6% while residential investment rose 6.6%. Federal government spending and imports subtracted from quarterly growth. The Fed’s assessment left the door open for a possible hike in interest rates in September, which would be the first rise since 2006.

Excluding the effect of company restocking, underlying demand in the economy picked up in the second quarter. Fed officials, considering when to begin raising rates this year, concluded on Wednesday that the U.S.is making progress.

There are signs in Thursday’s report that inflation is firming.

That would do little to help overall growth break out of its pattern of roughly 2 per cent growth through much of the expansion.