Skip to content

Strong Consumer Spending Lifts US Economic Growth To 2.2%

Business investment also strengthened, with spending on artificial intelligence contributing to the expansion

Photo by Leif Christoph Gottwald / Unsplash

The US economy grew faster than initially estimated during the second quarter, showing resilience despite higher energy prices and economic uncertainty, according to CNN.

Gross domestic product expanded at a 2.2% annualized rate after adjusting for inflation, up from the Commerce Department’s earlier estimate of 1.5%. Economists had expected the previous estimate to remain unchanged.

💡
Consumer spending, which represents roughly two-thirds of economic activity, rose 0.9%, marking its strongest increase in nearly two years. The initial estimate had put spending growth at just 0.1%.

Business investment also strengthened, with spending on artificial intelligence contributing to the expansion. Moody’s Ratings Chief Credit Officer Atsi Sheth said consumers and companies continued spending and investing despite inflation and uncertainty surrounding interest rates.

However, the pace remained below the 2.5% annualized growth recorded in the first quarter. Higher borrowing costs could also weigh on future activity after the Federal Reserve raised interest rates. More expensive credit could eventually slow both business investment and household spending, according to the report.

Related Tweet:

Also Read:

Private Sector Hiring Rebounds With 90,000 Jobs Added In September
Service businesses accounted for 59,000 new jobs, while goods-producing industries added 31,000.

Comments

Latest

Much Ado About Russia

Much Ado About Russia

Central to this racket, of course, is Russia’s invasion of Ukraine. The notion was that Russia was on the march.

Members Public
JD Vance Is Not Our Guy

JD Vance Is Not Our Guy

With the 2028 circus set to begin, as it always does, once next month’s midterms are over, it is worth reviewing Vance’s hawkish record and dispelling the notion that he is the sensible peacemaker he and his surrogates will present him as.

Members Public