The US economy experienced a greater expansion than initially estimated during the second quarter of this year, according to the Department of Commerce, which reported this on Thursday. This growth was driven by stronger consumer spending than originally anticipated. The economy expanded at an annual rate of 3.0 percent from April to June, an increase from the previously estimated 2.8 percent. Analysts had not expected any changes to this figure.
The Commerce Department attributed this revision primarily to an upward adjustment in consumer spending. Despite facing high interest rates, unexpectedly strong consumption has supported the US economy recently. However, with households using up their pandemic-era savings, a pullback in consumption was expected. In the latest revision, the increase in spending was partially counterbalanced by downward adjustments in other areas such as business investment, exports, and government spending. Imports, on the other hand, were revised higher.
The 3.0 percent growth rate for the second quarter this year represents an improvement from the 1.4 percent growth in the first quarter. Although the Federal Reserve has aggressively increased interest rates to combat rising inflation in 2022, it is widely anticipated to make its first rate cut since the pandemic in September. This move could potentially stimulate the economy.
